The Japanese stock market closed slightly lower on the 1st, and the weekly line also turned black, which is the first time in five weeks. As more economic data provided clues that the Federal Reserve’s interest rate hike cycle may be nearing its end, bond yields rose, causing a decline in Japanese technology stocks and dragging down the Japanese stock market.
According to Reuters, technology companies are usually highly leveraged industries and are sensitive to changes in interest rates.
The Nikkei 225 index closed down 0.17% at 33,431.51 points on the 1st, falling by 0.58% over the week. Among the constituent stocks of the Nikkei 225, there were 97 declining prices, 125 rising prices, and three unchanged prices. The only category of stocks that fell was technology stocks.
Following a rebound in US Treasury yields on the previous day, Japan’s 10-year government bond yield also rose by an additional 3.5 basis points to reach 0.705% on the 1st.
Maki Sawada, a strategist at Nomura Securities, said that as yields rise it will impact the stock market. She said that under current circumstances it would be difficult for Japanese stocks to regain their position above ¥38k (38k yen), so investors are seizing this opportunity to realize profits.
On November 20th,the Nikkei index climbed to its highest point in thirty-three years at ¥33，853．46 , making it also one of most significant monthly increases seen within three years; unfortunately there was no follow-up strength afterwards.