Tokyo, Sep 11: Japan’s benchmark Nikkei 225 fell sharply on Friday as rising oil prices, higher global bond yields and growing concerns over interest rates weighed on investor sentiment.
The Nikkei 225 closed at 64,011.34, down 1,259.61 points, or 1.93 per cent, from its previous close of 65,270.95. The index opened at 64,276.82 and moved between a high of 64,312.02 and a low of 63,208.63 during the session.
The decline came as investors reacted to weakness in global markets and renewed concerns that higher energy prices could keep inflation elevated. Asian markets broadly came under pressure, with South Korea’s Kospi and other major regional indices also recording losses.
Oil prices remained a major concern for investors. Brent crude had briefly moved close to $110 a barrel before easing to around $105 on Friday, but it was still headed for a strong weekly gain. The sharp rise in crude prices has increased worries about inflation and the possibility of tighter monetary policy globally.
Higher US Treasury yields also added to market pressure. The US 10-year Treasury yield remained close to 5 per cent after touching a multi-year high, making investors more cautious about taking risks in equity markets.
Japanese technology and semiconductor-related stocks faced selling pressure as investors reassessed the outlook for global growth and interest rates. The broader market also remained weak, reflecting a cautious approach among investors.
The market mood was further affected by continuing geopolitical tensions and uncertainty over energy supplies. Disruptions around key shipping routes have raised concerns that prolonged higher oil prices could increase costs for businesses and consumers and make it harder for central banks to control inflation.
Investors are now closely watching upcoming US inflation data for clues about the Federal Reserve’s next interest-rate decision. Expectations of tighter monetary policy could continue to influence global equity markets, including Japan.
Despite Friday’s sharp decline, the Nikkei remains significantly higher over the longer term. However, the latest fall highlights how quickly global developments in oil, inflation, interest rates and geopolitics can influence Japanese equities.