TOKYO, June 21 — Tokyo’s key Nikkei index was down over three per cent by the midday break Monday, tracking losses on Wall Street as investors digested Federal Reserve messaging on more restrictive monetary policy.
The benchmark Nikkei 225 index ended the morning session at 27,980.87, down 3.39 per cent or 983.21 points, while the broader Topix index was down 2.55 per cent or 49.58 points to 1,896.98.
“Tokyo shares have been sold as investors were disheartened by falls in US shares,” senior strategist Yoshihiro Ito of Okasan Online Securities said in a note.
On Wall Street, “reaction to last week’s hawkish FOMC meeting continued,” said Rodrigo Catril, senior strategist at National Australia Bank, in a commentary.
Expectations of a Fed rate hike sent US Treasury yields higher and pushing down stocks and the dollar.
Tokyo and US investors were reacting to comments by St Louis Fed President Jim Bullard in which he revealed himself as one of the seven FOMC members pencilling a rate hike by the end of 2022.
“Bullard is not a voting member this year and has a history of being very dovish and very hawkish, still, given market sensitivity, Bullard’s interview contributed to” volatility, Catril said.
The dollar fetched ¥110.16 (RM4.17) in late Tokyo morning hours, against ¥110.20 in New York and ¥110.07 in Tokyo on Friday.
Among major shares in Tokyo, Toyota was down 2.36 per cent at ¥9,600 and Fast Retailing, Uniqlo casual wear operator and market heavyweight, dropped 3.98 per cent to ¥79,180. amd SoftBank Group was down 3.77 per cent at ¥7,538. — AFP
