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Japan stocks down amid broader Asian declines, growing inflation worries

Japan stocks down amid broader Asian declines, growing inflation worries

Japanese stocks retreated Tuesday as deep declines in other Asian markets soured the mood and concerns mounted over the risk of inflation undercutting major economies.
Consumer finance and real estate shares were hit especially hard in the Nikkei 225 index's 1.1 percent drop to 14,021.17. The benchmark index briefly traded below 14,000 for the first time since May 29.
Still, traders said that the Nikkei is likely to stay supported at the psychologically key 14,000 level for rest of the week. Boosting sentiment was the dollar's climb to a three-month high against the yen, which should help Japanese exporters' profits.
The dollar was at 106.76 yen Tuesday afternoon, after earlier hitting 106.83 _ its highest level since Feb. 27. Against the euro, the greenback climbed to $1.5581 from $1.5627.
"I think the weakness is a temporary matter," said Masaru Ohnishi, strategist at JPMorgan.
Prompting the inflation concerns and the dollar rise were hawkish remarks by Federal Reserve Chairman Ben Bernanke, who noted that soaring energy prices were raising inflation risks. He said the Fed "will strongly resist" any erosion in long-term expectations for prices.
A tumble in Asian shares also sparked Nikkei futures selling, traders said. The Shanghai composite index at one point tumbled 8 percent.
Speculation that the Bank of Japan may also raise interest rates sooner than expected due to inflation worries weighed on real estate shares. Mitsubishi Estate Co. fell 1.7 percent to 2,585 yen, and Mitsui Fudosan Co. dropped 2.5 percent to 2,380 yen.
Chip shares were battered after the Philadelphia Semiconductor Index lost 0.8 percent overnight, and the Nasdaq shed 0.6 percent. Advantest Corp. fell 3 percent to 2,560 yen, and Elpida Memory Inc. slipped 2.7 percent to 4,030 yen.
Consumer finance shares fell for a fourth session on continued negative reaction to news that Citigroup will shut down its consumer finance business in Japan. Promise was down 4.1 percent at 3,270 yen, and Aiful lost 1.9 percent to 1,725 yen.
The Topix index of all Tokyo Stock Exchange First Section issues slid 1 percent to 1,383.20.


Updated : 2021-04-12 15:43 GMT+08:00