TOKYO, Aug 23 — Tokyo stocks closed lower today, extending US falls as concern grew that the Federal Reserve would stick to its rate-hike plans to combat inflation.
The benchmark Nikkei 225 index fell 1.19 per cent, or 341.75 points, to 28,452.75, while the broader Topix index lost 1.06 per cent, or 21.15 points, to 1,971.44.
The dollar stood at ¥137.29 (RM), against ¥137.48 yesterday in New York.
Shares came under pressure ahead of this week’s symposium of central bankers in Jackson Hole, Wyoming, with investors waiting to see if global monetary policymakers will renew their commitment to interest rate hikes to fight inflation.
There was a “big hit to risk appetite”, with market players apprehensive ahead of a speech by Fed Chair Jerome Powell at the meeting on Friday, said Tapas Strickland of National Australia Bank.
“Hawkish signals from Fed officials recently, as well as hawkish words from the (European Central Bank) about hiking even with growing recession risks in Germany has led to a re-assessment of the markets view on rates,” he said.
Soaring inflation and spiking natural gas prices are stoking fears of winter energy shortages and recession in Europe.
“Renewed fears of accelerating inflation, partly due to rising natural gas prices, are increasing,” Okasan Online Securities said in a note.
The fresh inflation fears fuelled sell orders in Tokyo trading, made worse “as US long-term (bond) yields rose above three per cent”, the brokerage added.
Sony Group dropped 3.31 per cent to ¥11,535, and SoftBank Group lost 2.42 per cent to ¥5,600.
Automakers were among losers, with Toyota closing down 1.98 per cent at ¥2,107.5, Honda down 1.93 per cent at ¥3,651, and Nissan off 1.29 per cent at ¥527.3.
But natural resources-linked shares were higher, with oil developer Index ending up 1.95 per cent at ¥1,568 and oil distributor Idemitsu Kosan up 1.11 per cent at 3,645 yen. — AFP
