Tokyo: Shares fall as tech heavyweights track Wall Street losses

JAPANESE shares closed lower on Monday (Aug 22), with tech heavyweights leading the decline after Wall Street fell at the end of last week on higher bond yields.

The Nikkei share average fell 0.5 per cent to 28,794.50, recovering some ground lost in early trade as China cut its benchmark lending rates.

The broader Topix inched 0.1 per cent lower to 1,992.59.

“The Japanese market tracked Wall Street’s declines (on Friday)... investors were concerned about inflation in Europe, which is higher than expected,” said Shuji Hosoi, a senior strategist at Daiwa Securities.

“The yields rose because of that and that spurred concerns about an economic slowdown. Today, Japanese manufacturers were hit by these worries.”

The rise in US yields and slowdown concerns due to fears of aggressive policy tightening to tame inflationary pressures in Europe, including the UK, hit Japanese companies which are mainly exporters, he added.

US stocks fell on Friday in a broad sell-off led by mega caps as bond yields rose, with the S&P 500 posting losses for the week after 4 straight weeks of gains.

Amazon.com, Apple and Microsoft all fell and were the biggest drags on the S&P 500 and Nasdaq. Higher rates tend to be a negative for tech and growth stocks, whose valuations rely more heavily on future cash flows.

In Japan, chip-making equipment maker Tokyo Electron was the biggest drag on the Nikkei, dropping 1.97 per cent. Robot maker Fanuc lost 1.93 per cent and sensor maker TDK slipped 2.26 per cent.

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Hino Motors fell 3.53 per cent to become the worst performer on the Nikkei as the automaker said it would suspend shipments of some small trucks after confirming that a widespread data falsification scandal included those models.

Energy-related shares rose, with oil explorers and refiners rising 2.47 per cent and 1.77 per cent, respectively.

Inpex Corp rose 3.01 per cent and was the top gainer on the Nikkei. REUTERS