Japanese shares decline as banking sector worries continue, yen strengthens

Ebara

23/03/2023 03:17

By Yantoultra Ngui
       SINGAPORE, March 23 (Reuters) - Japan's equities
declined on Thursday, tracking a weaker Wall Street, as
persistent concerns on the global banking sector following the
U.S Federal Reserve's hike and Treasury Secretary Janet Yellen's
remarks weighed on financials.
    The Nikkei index  .N225  dropped 0.24% to 27,400.37 by the
midday break, while the broader Topix  .TOPX  fell 0.44% to
1,954.33.
    The weaker performance comes amid a backdrop of a broader
muted Asian market, mainly hurt by remarks from Yellen who told
lawmakers overnight that she had not considered or discussed
"blanket insurance" for U.S. banking deposits without approval
by Congress.
    The sentiment was further weighed by Fed Chair Jerome
Powell's comment that the central bank would do "enough" to tame
inflation, despite suggestion that it was on the verge of
pausing rate hikes.
    "This month's flare-up in financial stability is set to
tighten lending conditions and hurt growth," Mansoor Mohi-uddin,
Bank of Singapore's chief economist, said. "We continue to see a
U.S recession this year."
    "Investors should thus remain cautious on risk assets,
expect a weaker U.S dollar as Fed rate hikes peak, and keep
favouring high-quality bonds as safe-haven hedges against
recession risks," he added.
    The Japanese yen  JPY=EBS  strengthened 0.43% to 130.87 per
dollar on Thursday.
    Financial stocks like the Chiba Bank Ltd  8331.T  and
Mitsubishi UFJ Financial Group Inc  8306.T  were among the
decliners in the Nikkei Index, dropping 2.11% and 1.76%
respectively.
    Gainers included recruitment firm Recruit Holdings Co Ltd
 6098.T  and vehicle maker Suzuki Motor Corp  7269.T , which
rose 5.07% and 2.78% respectively.
    Losers beat gainers by 117 to 99, while nine remained
unchanged.
    On the Topix, hotels operator Agora Hospitality Group Co Ltd
 9704.T  and artificial intelligence company HEROZ Inc  4382.T 
were among the top losers, down 8.00% and 7.47% respectively.
    Technology firm MegaChips Corp  6875.T  and semiconductor
company Axell Corp  6730.T  were the biggest gainers, up 11.98%
and 12.53%, respectively.
    Losers in the Topix outpaced gainers by 1,209 to 815, with
135 unchanged.

 (Reporting by Yantoultra Ngui; Additional reporting by Ankur
Banerjee; Editing by Varun H K)
 ((Yantoultra.Ngui@thomsonreuters.com;))