Japan Nikkei tumbles 3% on US inflation worries

Japan share market finished session significantly lower on Monday, 13 June 2022, as risk aversion selloff triggered across the board on tracking negative lead from Wall Street last Friday, amid reignited worries about more aggressive Federal Reserve policy tightening after red-hot U.S. inflation data.

Investors have worried that rising inflation could have an impact on the outlook for monetary policy ahead of the Federal Reserve's decision on interest rates on Wednesday. Traders are baking in half-point increases through September and are piling into bets for a potential 75-basis-point hike in the coming months.

At closing bell, the 225-issue Nikkei Stock Average stumbled by 836.85 points, or 3%, to 26,987.44. The broader Topix index of all First Section issues on the Tokyo Stock Exchange tanked 42.03 points, or 2.16%, to 1,901.06.

Total 28 of 33 TOPIX sectors ended the session lower, with Machinery (down 3.8%), Electric Appliances (down 3.5%), Transportation Equipment (down 3.3%), and Services (down 3.1%) issues suffered the largest percentage losses, while Electric Power & Gas (up 0.9%) issue enjoyed the largest percentage gain.

Chip-making equipment maker Tokyo Electron fell 5.26% and was the biggest drag on Nikkei, followed by technology investors SoftBank Group, which tanked 6.85%. Air-conditioner maker Daikin Industries lost 4.61% and a robot maker Fanuc fell 3.64%.

Bucking the trend, Kansai Electric rose 2.61% and was the top gainer on Nikkei after the nuclear power plant operator said it would restart a reactor in August, two months ahead of its previous plan. Department store chain Takashimaya rose 0.66% and airliner ANA Holdings rose 0.41%, as Japan eases restrictions on overseas travellers.

CURRENCY NEWS: The dollar hit 135 yen for the first time in two decades, buoyed by a rise in Treasury yields, with the 10-year reaching a more than one-month peak of 3.201%, also the highest since November 2018. The Japanese yen weakened as low as 135.17 per dollar on Monday, before recovering from some of those losses. The Japanese currency last changed hands at 134.42 against the greenback

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