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Japan Nikkei tumbles on U.S. monetary tightening worries

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Capital Market
Last Updated : Apr 06 2022 | 6:31 PM IST
Japan share market finished session lower on Wednesday, 06 April 2022, in line with global markets after hawkish comments from a Fed policymaker increased prospects of aggressive rate hikes by the U.S. Federal Reserve. Meanwhile, concerns about mounting economic sanctions on Russia and the spreading COVID-19 outbreaks and lockdowns in mainland China also undercut market sentiment.

At closing bell, the 225-issue Nikkei Stock Average declined 437.68 points, or 1.58%, to 27,350.30. The broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 26.21 points, or 1.34%, to 1,922.91.

The selloff emerged on Tokyo market on tracking decline in Wall Street overnight on renewed concerns about the outlook for monetary policy following comments from Federal Reserve Governor Lael Brainard. At a conference on Tuesday, Fed Governor Lael Brainard said she expects methodical interest rate increases and rapid reductions to the Fed's nearly $9 trillion balance sheet to bring U.S. monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.

Kansas City Fed President Esther George, a voting member of the Federal Open Market Committee, also in remarks on Tuesday supported a rapid run-off of the Fed balance sheet, and said as well that "50 basis-points is going to be an option that we'll have to consider."

Leading the slender upside on a down day were Dai-ichi Life, up 2.3%, followed by railway Keio, up 2.1%, and oil refiner Idemitsu Kosan), up 1.7%. On the downside were shippers Kawasaki Kisen Kaisha 6.1%, and Mitsui OSK off 5.3%.

CURRENCY NEWS: The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.621 following a recent jump from below 99. The Japanese yen traded at 123.85 per dollar, weaker as compared with levels below 123.3 seen against the greenback yesterday.

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First Published: Apr 06 2022 | 5:49 PM IST

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