Japan's Nikkei sheds early gains amid rising JGB yields

Daikin Industries

29/05/2024 07:55

(Updates at 0600 GMT)
       TOKYO, May 29 (Reuters) - Japan's Nikkei share average
shed early gains to end lower on  Wednesday as investors sold
growth stocks after the nation's benchmark 10-year yield hit its
highest in more than 12 years.
    The Nikkei  .N225  fell 0.77% to close at 38,556.87, after
rising as much as 0.7% to track strong performances of U.S.
chip-related stocks, driven by AI darling Nvidia  NVDA.O .  
    The broader Topix  .TOPX  ended nearly 1% lower at 2,741.62.
        "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."
    Japan's 10-year bond yield  JP10YTN=JBTC  hit 1.075%, its
highest level since December 2011, as traders gauged growing
bets that policy tightening by the Bank of Japan is imminent. 
    Higher yields could hurt growth stocks whose appeal lies in
future cash flows.
    The Topix's growth stock index  .ITOPXG  lost 1.1%, while
the value shares index  .TOPXV  fell 0.8%.
    Chip-making equipment maker Tokyo Electron  8035.T  shed
early gains to end 0.3% lower. Shares of air-conditioning maker
Daikin Industries  6367.T  fell 2.3% and Uniqlo-brand owner Fast
Retailing  9983.T  lost 1.2%.
    Mitsubishi Electric  6503.T  fell 4.5% as the home
appliances maker lowered the target for its return-on-equity to
9% from 10%.   
    Nuclear power plant operator Tokyo Electric Power Holdings
 9501.T  fell 8.3% to become the biggest percentage loser on the
Nikkei.
        The utility sector  .IEPNG.T  fell 2.6% to become the
worst performer among the Tokyo Stock Exchange's 33 industry
sub-indexes. 
    Chip-testing equipment maker Advantest  6857.T  rose 0.8%
and SoftBank Group  9984.T  gained 2.7%, supported by an
overnight 7% gain in shares in Nvidia. An index of U.S.
semiconductors  .SOX  rose nearly 2%.
    The insurance sector  .IINSU.T  was the top performer,
rising 0.8%, with Sompo Holdings  8630.T  jumping 4.2% to become
the top percentage gainer on the Nikkei. 
    

 (Reporting by Junko Fujita; Editing by Mrigank Dhaniwala and
Sherry Jacob-Phillips)
 ((junko.fujita@thomsonreuters.com;))