Japanese Shares Drop on Surging Bond Yields

The Nikkei 225 Index dropped 1.5% toward 68,000 on Tuesday, reversing the previous session’s gains as global bond yields surged amid persistent concerns over inflation and surging government spending. Japan’s benchmark 10-year government bond yield climbed to around 2.95%, its highest level in three decades amid mounting fiscal concerns and growing expectations of an imminent Bank of Japan interest rate hike. The Takaichi administration’s plan to cut the consumption tax on food to 1% for two years has fueled market concerns, as the government has yet to identify an alternative revenue source. Notable declines came from technology and consumer stocks, including Tokyo Electron (-2.9%), Advantest (-1.7%), Lasertec (-1.6%), Fast Retailing (-1.3%) and Nintendo (-2.4%). In corporate news, Nvidia agreed to invest as much as $105 billion to support SB Energy, a SoftBank Group subsidiary developing a major data center project in Ohio for OpenAI.

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