Nikkei 225 and TOPIX Under Pressure After U.S. Treasury Yields Surge

Akira Ito
08 Jan, 2025
Tokyo

Benchmark indexes in Tokyo traded down amid interest rate path worries and volatile tech stocks. 

The Nikkei 225 stock average declined 0.2%, and the broader TOPIX index decreased 0.5%, but they managed to recover from the worst levels of the session. 

Market sentiment was weak in Tokyo after the yield on the 10-year U.S. Treasury note rose to a seven-month high of 4.69%, following the release of December's service sector activities survey.

The service sector continued to expand for the tenth month in a row in December, but inflation expectations rose sharply ahead of the possible tariffs on imported goods by the president-elect Trump's administration as early as this month. 

Benchmark indexes accelerated decline in the early hours of trading, mirroring a sharp sell-off in tech stocks in overnight trading in New York fueled by persistent inflation worries. 

Investors lowered expectations for additional rate cuts in the imminent future after the release of the service index update. 

Closer to home, investors are looking forward to the release of household spending and earnings data later in the week. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 0.2% to 39,991.85, and the broader TOPIX index fell 0.5% to 2,771.61. 

Semiconductor-related stocks rebounded from morning losses in Tokyo, mirroring declines on Wall Street in overnight trading. 

Tokyo Electron Ltd. increased 1.5% to ¥27,520.0, Advantest Corp. gained 3.5% to ¥10,080.0, and Disco Corp. gained 4.6% to ¥48,570.0. 

Honda Motor Corp. declined 0.4% to ¥1,599.50, Nissan Motor Corp. fell 2.5% to ¥466.80, and Toyota Motor Corp. added 0.9% to ¥3,080.0. 

Tokio Marine Holdings dropped 4.5% to ¥5,481.0, Dai Ichi Life Holdings fell 3.4% to ¥4,275.0, and SOMPO Holdings eased 3.3% to ¥4,011.0.