FX.co ★ Japanese Shares Fall on Rising Yields

The Nikkei 225 Index declined 0.8% to slip below 65,500, while the broader Topix Index fell 1.4% to 4,055 on Tuesday, extending the previous session’s losses as global bond yields moved higher amid expectations that energy-driven inflation will lead to tighter monetary policy.

Japanese equities also tracked overnight weakness on Wall Street, where the US 10-year Treasury yield climbed above 5.2% and the 30-year yield reached 5.55%. At the same time, oil prices resumed their ascent after Iranian officials reportedly voiced doubts about securing an agreement before the US midterm elections in November, following President Donald Trump’s rejection of Tehran’s latest proposal.

Selling pressure was pronounced in heavyweight technology, financial, and consumer names, with notable declines in SoftBank Group (-2.1%), Mitsubishi UFJ (-2.5%), and Toyota Motor (-2.7%).