The Nikkei Average extended its sharp decline during the morning session, with stocks broadly lower amid falling US equities, higher crude oil prices and rising long-term interest rates. Rising geopolitical risks weighed on investor sentiment, and selling continued to spread at the start of trading.
In the Japanese stock market's morning session, the Nikkei Average ended down ¥1,742.18 at ¥64,473.16, with estimated trading volume exceeding 1.1 billion shares. Following another decline in US markets, losses deepened from the opening, as caution intensified over rising geopolitical risks, higher crude oil prices and rising long-term interest rates.
The Nikkei Average remained broadly lower after the opening, with selling spreading beyond high-priced semiconductor and technology stocks to economically sensitive stocks. Among individual stocks, Shionogi, Daiichi Sankyo, Sumitomo Pharma, Itochu and Seven & i Holdings rose, while SoftBank Group, Tokyo Electron, Advantest, TDK, Recruit Holdings, Fast Retailing, Kyocera, Murata Manufacturing, Toyota Tsusho and Shin-Etsu Chemical declined.
The afternoon session is expected to see trading consolidate near the lows, with the Nikkei Average likely to continue searching for a bottom after falling well below its 75-day moving average in the ¥66,600 range. Domestic long-term interest rates are expected to rise to 3.015%, reaching a level not seen since September 1996. US developments remain a drag, and cautious buying restraint focused on geopolitical risks and interest-rate trends may continue.