Japan's Nikkei ends lower as higher yields, inflation fears weigh

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Tue 08:01

Updates with closing prices
By Junko Fujita
TOKYO, Oct 20 (Reuters) - Japan's Nikkei share average ended lower on Tuesday, dragged lower by technology stocks as investors weighed rising bond yields and persistent inflation concerns that clouded the outlook for growth shares.
The Nikkei .N225 fell 1.3% to 64,075.42, and the broader Topix .TOPX slipped 1.43% to 4,009.21. 
"Bond yields are on the rise as markets expect central bank tightening to fend off inflation," said Koji Toda, senior fund manager at Resona Asset Management.
"This anxiety weighs on investor sentiment. US technology stocks rose overnight, but they are cautious about whether this momentum will continue."
The tech-heavy Nasdaq Composite gained 1% overnight as investors returned to the chip sector and other AI-related stocks after last week's bruising selloff, while awaiting key corporate earnings reports. .N
Nasdaq futures NQc1 were down 0.19% in Asian trading.
US Treasury yields rose overnight, with the benchmark 10-year yield coming off its biggest weekly drop in seven months, as concerns about the impact of higher interest rates on AI-related stocks eased.
In Japan, AI investor SoftBank Group 9984.T fell 6%, making it the biggest drag on the Nikkei.    
Fibre optic cable maker Fujikura 5803.T fell 6.47% and peer Furukawa Electric 5801.T lost 5.9%.
Chip-testing equipment maker Advantest 6857.T ended down 1.68%.
    Uniqlo-brand owner Fast Retailing 9983.T rose 2.04% to provide the biggest support for the Nikkei. 
Banks fell, with Mizuho Financial Group 8411.T slipping 5.04%, while Mitsubishi UFJ Financial Group 8306.T lost 3.65%. 
The Topix value index .TOPXV lost 1.98%, while the growth index .TOPXG fell 0.84%.
Of more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 76% fell, 21% rose and 2% traded flat. 

 (Reporting by Junko Fujita; Editing by Jochelle Mendonca)
 ((junko.fujita@thomsonreuters.com;))