Japan's Nikkei erases gains as JGB yields rise

Daikin Industries

29/05/2024 04:10

TOKYO, May 29 (Reuters) - Japan's Nikkei share average
erased early gains to trade lower on Wednesday as investors sold
growth stocks on worries about the impact of rising Japanese
government bond (JGB) yields.
    The Nikkei  .N225  was down 0.17% at 38,789.52 by the midday
break after rising as much as 0.7% to track the strong
performance of U.S. chip-related stocks driven by Nvidia's rise.
 
    The broader Topix  .TOPX  fell 0.27% to 2,761.05.
    "The market became nervous about rising JGB yields, which is
a headwind for heavyweight growth stocks," Shoichi Arisawa,
general manager of the investment research department at
IwaiCosmo Securities said.
    "The gains in domestic stocks were eliminated by the rising
JGB yields."
    Higher yields could hurt growth stocks whose appeal lies in
future cash flows.
    The Topix's growth stock index  .ITOPXG  lost 0.49%, while
the value shares index  .TOPXV  inched down 0.07%.
    Japan's 10-year bond yield  JP10YTN=JBTC  hit a more than
12-year high of 1.065% earlier in the session amid growing bets
that policy tightening by the Bank of Japan is imminent. 
    Chip-making equipment maker Tokyo Electron  8035.T  reversed
course to slip 0.11%. Air-conditioning maker Daikin Industries
 6367.T  fell 2.17%. Uniqlo-brand owner Fast Retailing  9983.T 
lost 0.88%.
    Mitsubishi Electric  6503.T  fell 6.33% as the home
appliances maker lowered the target for its return on equity to
9% from 10%.   
    Chip-testing equipment maker Advantest  6857.T  rose 2.35%
and SoftBank Group  9984.T  gained 3.21%, supported by an
overnight 7% gain in shares in Nvidia  NVDA.O . An index of U.S.
semiconductors  .SOX  rose 1.9%.
    The shipping industry  .ISHIP.  fell 1.5% to become the
worst performer among the Tokyo Stock Exchange's 33 industry
sub-indexes. 
    The insurance sector  .IINSU.T  was the top performer,
rising 2.36%, with Sompo Holdings  8630.T  jumping 5.45% to
become the top percentage gainer on the Nikkei. Peer T&D
Holdings  8795.T  rose 3.85%. 

 (Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)
 ((junko.fujita@thomsonreuters.com;))