Tokyo stocks fell more than ¥1,900 at one point on the 2nd, with the Nikkei 225 down ¥1,742.18 at a morning close of ¥64,473.16. The decline reflected a combination of worsening tensions in the Middle East, higher crude oil prices and rising interest rates.
The Nikkei 225 fell more than ¥1,900 at one point in the Tokyo market on the 2nd, and the morning close was ¥64,473.16, down ¥1,742.18 from the previous day. The decline was attributed to sympathy selling following losses in overseas markets and deteriorating investor sentiment. Technology stocks, particularly AI-related stocks, recorded notable declines and led the broader market lower.
The secondary-market yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, rose to 3.015% at one point, reaching its highest level in 30 years since September 1996. Rising crude oil prices and inflation concerns were behind the move and pushed domestic interest rates higher.
The market focused on the financial risks of AI-related companies, particularly semiconductor companies, and investors were seen reducing their stock holdings amid concerns that higher interest rates would worsen their financial conditions. Major securities firms were reported to believe that rising interest rates were weighing on the overall market.
There were also developments in the insurance and financial markets, as reported separately. Meiji Yasuda Life raised its assumed interest rate to 3.45%, and variable mortgage rates were also reported to have risen.