Tokyo stocks close lower

TOKYO (AFP): Tokyo stocks closed lower on Thursday, led by tech shares as investors remained wary of further US rate hikes.

The benchmark Nikkei 225 index dropped 1.54 percent, or 499.38 points, to end at 31,872.52, while the broader Topix index fell 1.43 percent, or 34.02 points, to 2,345.51.

The Japanese market “extended the trend in US trade where economic cycle-sensitive and high-tech shares were under pressure from soaring yields in 10-year US bonds”, Iwai Cosmo Securities said.

Rising oil prices lifted energy shares, but also fuelled speculation that the Fed might step up its fight against inflation, analysts said.

“Day in and day out, the ongoing reality of higher-for-longer interest rates sets in deeper as the Fed’s messaging strengthens on ‘The Street’,” said Stephen Innes of SPI Asset Management.

Investors were also watching the forex market, where the yen’s steady depreciation has prompted speculation that Japanese authorities may intervene to lift the Japanese unit and dump the dollar.

While a lower yen is generally good for Japanese exports, it increases the cost of imports such as food and energy for Japanese families.

The dollar stood at 149.34 yen in Asian trade, off from 149.64 yen in New York.

The Nikkei’s fall also came after many investors bought a variety of shares on Wednesday, the final trading day to claim dividend payouts before the end of the month.

Those buyers offloaded their shares Thursday, and their sales were considered to have driven down the Nikkei, analysts said.

Among major shares, Sony Group dropped 1.45 percent to 12,225 yen, after the firm announced that the veteran leader of its PlayStation business Jim Ryan will retire after 30 years with the group.

Mitsubishi Motors jumped 3.17 percent to 669.9 yen, following a report that it planned to pull out from its production operations in China.

Rising oil prices buoyed energy firms. Oil and gas developer Inpex rose 2.47 percent to 2,323 yen. Japan Petroleum Exploration added 1.38 percent to 5,870 yen.

Tokyo Electron, which makes tools to build semiconductors, fell 1.85 percent.