FX.co ★ Japanese Shares Drop as Oil, Bond Yields Surge

The Nikkei 225 Index slid 3% to below 63,500 on Friday, while the broader Topix Index lost 1.9% to close at 3,977. Both benchmarks were on track for sharp weekly declines as surging oil prices and rising global bond yields put heavy pressure on equities. Sentiment was further dampened by caution ahead of the US CPI release, after Thursday’s PPI data showed a faster-than-expected increase in wholesale prices, strengthening expectations of a Federal Reserve rate hike next week.

On the domestic front, the Bank of Japan is also widely expected to raise interest rates. BOJ board member Kazuyuki Masu signaled that the central bank will continue to tighten monetary policy and gradually withdraw monetary support as underlying inflation approaches its 2% target.

Among individual names, steep losses were recorded in major stocks such as Kioxia Holdings (-6.9%), SoftBank Group (-5.9%), Advantest (-6.2%), Mitsubishi UFJ Financial Group (-1.8%), and Fast Retailing (-1.2%).