Nikkei Briefly Tumbles; Key Long-Term Rate Hits 17-Year High

Tokyo, Nov. 17 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average briefly gave up over 500 points Monday due partly to the impact of Japan-China tensions, while the key Japanese long-term interest rate hit the highest level in about 17 and a half years. The Nikkei temporarily fell below 50,000 in the morning for the first time since Nov. 7, but recouped most of the losses to end the day down 52.62 points, or 0.10 pct, from Friday at 50,323.91. On the Tokyo stock market, issues related to China met with selling, with investors discouraged by a call by China’s government for its citizens to refrain from visiting Japan, apparently in response to Japanese Prime Minister Sanae Takaichi’s recent remark about a potential Taiwan contingency. Particularly, department store operators Isetan Mitsukoshi Holdings and Takashimaya plummeted amid worries over a possible decrease in Chinese shoppers. Fast Retailing, the operator of Uniqlo clothing stores, which runs business in China, also succumbed to selling. Investors “may now think that doing business in China is a risk,” an official of a major securities firm said. Also weighing on the Tokyo market were receding hopes for an interest rate cut in the United States, brokers said. Meanwhile, the yield on the most recent issue of 10-year Japanese government bonds, Japan’s benchmark long-term interest rate, hit 1.730 pct at one point in interdealer trading Monday, the highest level since June 2008. JGB selling accelerated due to concerns that the Takaichi government’s planned economic measures will further worsen Japan’s fiscal condition, market sources said. A rise in U.S. long-term interest rates reflecting diminishing hopes for a rate cut by the U.S. Federal Reserve also pushed up Japanese interest rates, the sources said. END [Copyright The Jiji Press, Ltd.]