TOKYO – Tokyo’s key Nikkei index tumbled just over 3% after the open today, tracking losses on Wall Street as investors digested Federal Reserve messaging on more restrictive monetary policy.
The benchmark Nikkei 225 index was down 3.01%, or 870.79 points, to 28,093.29 just over 30 minutes after the opening bell, while the broader Topix index was down 2.44%, or 47.51 points, to 1,899.05.
“Tokyo markets are in a storm following drops in US shares,” said Okasan Online Securities in a note.
On Wall Street, “reaction to last week’s hawkish FOMC (Federal Open Market Committee) meeting continued,” said Rodrigo Catril, senior strategist at National Australia Bank, in a commentary.
Expectations of a Fed rate hike sent US Treasury yields higher, and pushed down stocks and the dollar.
Tokyo and US investors were reacting to comments by St Louis Fed president Jim Bullard, in which he revealed himself as one of the seven FOMC members pencilling a rate hike by the end of 2022.
“Bullard is not a voting member this year, and has a history of being very dovish and very hawkish. Still, given market sensitivity, Bullard’s interview contributed to” volatility, said Catril.
The dollar fetched ¥110.19 (RM4.15) in early Asian trade against ¥110.20 in New York and ¥110.07 in Tokyo on Friday.
Among major shares in Tokyo, Toyota was down 1.93% at ¥9,643, and Uniqlo casual wear operator and market heavyweight Fast Retailing dropped 2.83% to ¥80.140.
On Wall Street on Friday, the Dow ended down 1.6% at 33,290.08, while the broad-based S&P closed down 1.3% and the tech-rich Nasdaq finished down 0.9%. – AFP, June 21, 2021
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