Tokyo stocks close sharply lower amid concerns over Fed's monetary tightening-Xinhua

Tokyo stocks close sharply lower amid concerns over Fed's monetary tightening

Source: Xinhua| 2022-05-09 18:03:17|Editor: huaxia

TOKYO, May 9 (Xinhua) -- Tokyo stocks closed sharply lower Monday on concerns the U.S. Federal Reserve will continue its aggressive monetary policy tightening, widening its policy gap with Japan.

The 225-issue Nikkei Stock Average dropped 684.22 points, or 2.53 percent, from Friday to close the day at 26,319.34.

The broader Topix index, meanwhile, lost 37.52 points, or 1.96 percent, to finish at 1,878.39.

Brokers here said that upbeat U.S. jobs data for April released late last week raised the prospects of a further rate hike by the Fed, which triggered dollar buying Monday.

The U.S. dollar climbed from the mid-130 yen range to the lower 131 yen range during trading hours, dealers noted, amid investor concerns over a widening monetary policy gap between the United States and Japan.

Japan has maintained its ultra-loose monetary policy despite other central banks tightening theirs to combat rapid inflation, with the central bank here believing such inflationary pressure will be temporary despite surging prices for crude oil and other commodities.

Resource-poor Japan is grappling with a jump in inflation, which is nearing the Bank of Japan's inflation goal of 2 percent, although strategists have pointed out that such a rapid rise in inflation in the longer term could hurt corporate earnings as well as household incomes, as inflation here is not in tune with a rise in wages or an increase in private demand.

Brokers also said the market inherited a weak lead from Wall Street's slump late last week as well as U.S. futures Monday pointing towards further declines later in the day.

By the close of play, iron and steel, air transportation, and nonferrous metal issues comprised those that declined the most on the Prime Market, with issues that fell outpacing those that rose by 1,598 to 211, while 28 ended the day unchanged.

Heavily-weighted Nikkei components dragged the broader market lower, with Uniqlo operator Fast Retailing and SoftBank Group, dropping 6.3 and 3.5 percent, respectively.

Japan Steel Works plunged 18.8 percent, after announcing earlier in the day that one of its subsidiaries had falsified data since 1998.

In another blow to the steel sector, JFE Holdings tumbled 7.1 percent, after the firm opted not to disclose its earnings forecast for the current fiscal year through March on Friday, saying its outlook remained uncertain.

Transportation issues also took a hit, with airline ANA Holdings diving 5 percent, while travel agency H.I.S. relinquished 5.3 percent.

Shipping firm Nippon Yusen slipped 0.9 percent, after its earnings forecast for fiscal 2022 missed median market expectations.

On the Prime Market on Monday, 1,263.42 million shares changed hands, dropping from Friday's volume of 1,498.56 million shares.

The turnover on the first trading day of the week came to 2,954.55 billion yen (22.53 billion dollars).