TOKYO: Japanese stocks fell by the most in over a month, extending losses from late last week following hawkish comments from the Federal Reserve.
Uniqlo operator Fast Retailing Co. and SoftBank Group Corp., two of the most heavily weighted stocks on the Nikkei 225, were the largest contributors to the loss in the index, which slid as much as 3% in its fourth day of declines.
Electronics and chemicals makers were the biggest drags on the broader Topix, which was down 2.3% as of 9:50 a.m., with all but one industry group in the red.
The S&P 500 index and commodities dropped Friday on the prospect of less accommodative U.S. monetary policy. Inflation risks may warrant the start of interest rate hikes next year, St. Louis Fed President James Bullard said in an interview on CNBC.
"Given the Japanese markets had been lacking a domestic catalyst and been hostage to global markets, it’s no surprise to see investors taking profits or cutting losses, ” said Takeo Kamai, head of execution services at CLSA Securities Japan Co. "However, given the Nikkei was still at a multi-year high and valuations weren’t necessarily cheap, this correction may be healthy.” - Bloomberg