TOKYO, Oct. 17 (Xinhua) — Japan’s benchmark Nikkei stock index closed lower Monday, tracking Wall Street’s losses late last week, on renewed recession concerns following data showing rising expectations for inflation.
The 225-issue Nikkei Stock Average dropped 314.97 points, or 1.16 percent, from Friday to close the day at 26,775.79.
The broader Topix index, meanwhile, lost 18.63 points, or 0.98 percent, to finish at 1,879.56.
Brokers here said that sentiment was dented by U.S. shares losing ground in the previous session, following a U.S. consumer sentiment survey showing expectations for inflation over the next year jumped to 5.1 percent from 4.7 percent in September.
The University of Michigan’s consumer sentiment survey also showed that inflation expectations over the next five years also increased from a month earlier, they added.
“Market players choose to secure profits today following sharp gains on Friday, as inflation concerns in the U.S. continue with the Federal Reserve’s ongoing aggressive rate hikes raising the prospect of a recession,” a Tokyo-based investment analyst was quoted as saying.
While the Fed pushes ahead with its monetary tightening policy to combat inflation, the Bank of Japan’s governor Haruhiko Kuroda said the central bank would remain committed to its ultra-loose policy to underpin the economy.
This, however, analysts here have said, is leading to a widening interest rate gap between Japan and the United States and is driving the yen lower versus the U.S. dollar.
Japanese Finance Minister Shunichi Suzuki warned of currency intervention on Monday again following the yen dropping to a 32-year low late last week and remained weak against the U.S. dollar in the upper 148 zone.
“If we see excessive volatility caused by speculative moves, we will take decisive action. There is no change in this view at all,” Suzuki said.
By the close of play, mining, pharmaceutical, and wholesale trade issues comprised those that declined the most.
Heavily weighted issues dragged the broader market lower, with tech startup investor SoftBank Group dropping 1.8 percent, while Uniqlo clothing store operator fell 1.3 percent.
Despite the yen’s weak tone, exporters retreaded on broader concerns the U.S. economy could slip into a recession, with Toyota Motor shedding 0.4 percent, Suzuki Motor down 1.5 percent, while Yamaha Motor closed 0.9 percent lower.
Department store operators found favor, however, on hopes for increased patronage, with J.Front Retailing Co. Ltd. advancing 2.1 percent, while Isetan Mitsukoshi Holdings Ltd. climbed 4.5 percent.
Takashimaya Co. Ltd., for its part, ended 3.2 percent higher.
Similarly, air transportation issues gained, with ANA Holdings rising 1.2 percent, while rival Japan Airlines added 0.9 percent.
Issues that fell outpaced those that rose by 1,390 to 384, while 63 ended unchanged on the Prime Market, with 1,057.21 million shares changing hands, down from Friday’s volume of 1,319.31 million shares.
The turnover on the first trading day of the week came to 2,423.93 billion yen (16.30 billion U.S. dollars).