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Japanese Shares Drop on Higher Oil Prices, Bond Yields

The Nikkei 225 Index declined 1.93% to 64,011, while the broader Topix Index slipped 0.65% to 4,028 on Friday, with both benchmarks recording steep weekly losses as elevated oil prices and rising global bond yields weighed on equities. Investors also awaited the US CPI report after Thursday’s PPI data showed wholesale prices picked up last month, strengthening expectations for a Federal Reserve rate hike next week. Domestically, the Bank of Japan is likewise expected to raise interest rates, with board member Kazuyuki Masu indicating that policymakers will continue tightening and gradually reduce monetary support as underlying inflation approaches the 2% target. Technology and AI-related shares led the selloff, with Kioxia Holdings falling 7%, SoftBank Group dropping 4%, Advantest losing 6.5%, Tokyo Electron declining 2.6% and Taiyo Yuden retreating 2.1%.

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