Tokyo: Nikkei sees worst day in 6 weeks, tracks Wall Street losses
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JAPAN'S Nikkei closed lower on Monday (Apr 25) to post its largest drop in more than 6 weeks, as the index tracked Wall Street’s losses after Federal Reserve Chair Jerome Powell indicated near-term interest-rate hikes.
The Nikkei share average ended 1.9 per cent lower at 26,590.78 — the biggest percentage decline since Mar 11. The broader Topix lost 1.5 per cent to 1,876.52.
Wall Street tumbled more than 2.5 per cent on Friday, as surprise earnings news and increased certainty around aggressive near-term interest rate rises took a toll on investors.
Powell indicated the US central bank was preparing a half-point interest rate hike at its May meeting, with more to come.
“The US markets fell too much on Friday on the rate hike comments, and the Japanese market reacted to the US market too much today,” said Shuji Hosoi, senior strategist at Daiwa Securities.
Heavyweights also dragged the Nikkei lower, with Uniqlo clothing owner Fast Retailing falling 5.27 per cent, technology investor SoftBank Group sliding 7.8 per cent and Daikin Industries losing 3.36 per cent.
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All except 1 of the 33 industry sub-indexes on the Tokyo Stock Exchange fell, with oil explorers leading the decline with a 3.99 per cent drop after oil prices slid.
Airlines fell 2.65 per cent, with ANA Holdings losing 3.43 per cent after the airline cut its earnings forecast and flagged 145 billion yen (S$1.6 billion) in net loss for the financial year.
Rival Japan Airlines slipped 1.68 per cent.
Nissan Motor fell 5.05 per cent after a report that its top shareholder Renault was exploring a potential stake sale.
Daiwa’s Hosoi said the market awaits comments from Bank of Japan Governor Haruhiko Kuroda on the latest currency move after the central bank’s policy meeting this week.
“If he does not say anything about the yen’s weakness, then the market would assume the central bank allow the yen to decline further, which will cause another sharp currency move and that is negative for the stock market,” Hosoi added. REUTERS
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