Rising capital costs are drawing attention to companies' earnings power and prompting inflows into resource and regional bank shares. The Nikkei fell on the 31st, while expectations of U.S. rate hikes and developments in the Middle East were also cited as factors.
Rising capital costs are weighing on the upside of the stock market. Against a backdrop of historically high interest rates, investors are placing greater importance on whether companies can improve their earnings power.
It has been pointed out that not only turmoil in the Middle East and expectations of U.S. rate hikes, but also the rise in capital costs itself, is affecting investment decisions.
In the Japanese stock market on the 31st, the Nikkei Stock Average fell ¥93 from the previous Friday's close, with the decline at one point exceeding ¥1,500.
At the same time, money is reportedly flowing into resource and regional bank shares. While expectations of U.S. rate hikes are intensifying selling pressure, this trend is attracting attention as a sign of stability in Japan's domestic capital markets.