Tokyo stocks experienced a significant downturn on Thursday morning, driven by overnight losses on Wall Street and a rise in U.S. Treasury yields. The Nikkei Stock Average fell by 662.31 points, or 0.95%, settling at 69,373.40, while the broader Topix index saw a decline of 62.02 points, or 1.49%, to 4,092.09.
The market downturn was largely attributed to growing concerns about increasing U.S. borrowing costs, which could potentially impact consumer spending and business investment. The yield on the 10-year U.S. Treasury note reached 5.36%, marking its highest level since April 2002. This rise in yields added pressure on Japanese markets, with Japan’s benchmark 10-year government bond yield also exceeding 3%.
Investor sentiment was further dampened by geopolitical tensions, particularly following attacks on two Saudi Arabian airports by Iran-aligned Houthi forces, which renewed concerns over crude oil supplies.
Most sectors across the Tokyo market recorded losses, reflecting the broader concern over the economic implications of higher borrowing costs and geopolitical instability. The combined effect of these factors contributed to the sharp decline in Tokyo stocks, echoing the cautious mood seen in global markets.