TOKYO –Tokyo's benchmark stock index closed down more than 1% today, hit by fears that an expected strong recovery in the global economy will fan inflation.
The Nikkei 225 index slipped 1.61%, or 484.33 points, to 29,671.70, while the broader Topix index was down 1.82%, or 35.28 points, at 1,903.07.
Markets have become jittery over prospects that pandemic recovery will send prices soaring and lead to a hike in lending rates – especially in the United States, where Congress is moving forward on a US$1.9 billion stimulus plan.
“The market is increasingly expecting inflation, and higher yields are a negative factor for fast-growing shares such as the IT and high-tech sectors,” said senior strategist Yoshihiro Ito of Okasan Online Securities.
US shares largely recouped early losses yesterday after Federal Reserve chief Jerome Powell tamped down inflation worries, but the tech-rich Nasdaq index closed lower.
“Concerns over interest rates prompted investors to lock in profits” in Tokyo, Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP. “It may take some time for the market to calm down from its recent overheat.”
The dollar fetched 105.53 yen, against 105.19 yen in New York late Tuesday.
Chip-testing equipment maker Advantest lost 3.30% to 9,350 yen, while industrial robot maker Fanuc dropped 4.65% to 26,300 yen.
SoftBank Group, which has invested in tech firms and start-ups, dropped 5.20% to 9,982 yen.
Sony slumped 5.46% to 11,325 yen on profit-taking with Nintendo down 2.33% at 66,440 yen.
Toshiba lost 1.28% to 3,455 yen after a report said the engineering firm is in talks with General Electric about joint production of offshore wind power facilities. – AFP, February 24, 2021
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