Tokyo, April 17, 2024 (AFP)
Tokyo stocks closed lower on Wednesday after the head of the Federal Reserve warned that interest rates would likely have to stay elevated for some time to combat sticky inflation.
The benchmark Nikkei 225 index dropped 1.32 percent, or 509.40 points, to 37,961.80, while the broader Topix index lost 1.26 percent, or 33.96 points, to 2,663.15.
Traders reversed early gains and the market stumbled to its lowest close in two months after benchmark US Treasury yields spiked and weighed on high-tech shares, analysts said.
Fed boss Jerome Powell's comments came after data showed inflation had edged up for three months and the jobs market remained resilient despite borrowing costs being at two-decade highs.
He said: "Given the strength of the labour market and progress on inflation so far, it is appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us."
The prospect of US rates remaining high has sent the dollar surging this year, and this week hit a 34-year high against the yen as Japan's central bank keeps monetary policy loose.
"Investors became wary about the yen's fall, which was partly fuelled by the rise of the US yields," Daiwa Securities said.
The dollar stood at 154.53 yen, against 154.72 yen in New York.
Japanese officials have said they are keeping tabs on the forex market and are ready to intervene to support the yen.
"The market was cautious about possible damage to the Japanese economy from rising commodity prices, coupled with the yen's fall," Daiwa added.
Japanese semiconductor shares took a hit after Dutch tech giant ASML issued a disappointing earnings report, with Advantest plunging 4.48 percent to 5,459 yen and Tokyo Electron off 0.98 percent to 37,290 yen.
Toyota fell 1.43 percent to 3,597 yen and Honda lost 1.30 percent to 1,789.5 yen, while heavily weighted Fast Retailing, which operates the Uniqlo brand, dipped 0.44 percent to 40,690 yen.
Sony Group shed 2.09 percent to 12,665 yen and SoftBank Group lost 1.33 percent to 8,000 yen but Nintendo gained 0.81 percent to 7,585 yen.

Sumber : AFP