Japan’s Nikkei falls for fourth session amid US rate hike concerns

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TOKYO – The Japanese Nikkei fell for a fourth consecutive session on Tuesday, following overnight losses on Wall Street ahead of a US Federal Reserve rally later this week, as airlines and retailers jumped on the news regarding a possible relaxation of border rules on COVID.

The Nikkei closed down 1.19% at 28,452.75, while the broader Topix slid 1.06% to 1,971.44.

Wall Street closed sharply lower on Monday as investors feared the Jackson Hole rally could reinforce a strong commitment by the Fed to stamp out inflation.

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“The Japanese market is weak today but compared to a nearly 2% decline in the Dow, the Nikkei decline is smaller. This is because investors have started buying stocks at a discount,” said Jun Morita, managing director of the research department at Chibagin Asset Management.

Meanwhile, a PMI survey showed manufacturing growth in Japan slowed to a 19-month low in August as output and new orders picked up amid mounting pressure. due to persistently rising raw material and energy costs and weaker global demand.

Tech stocks tumbled, following losses from their U.S. counterparts after Treasury yields rose.

Startup investor SoftBank Group fell 2.42% and medial platform service provider M3 fell 2.93%. Chip-making equipment maker Tokyo Electron fell 0.79%.

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Hino Motors, the truck and bus unit of Toyota Motor, fell 6.36% and was the biggest loser in the Nikkei after its engine-related misconduct extended to small trucks. Toyota fell 2.16%.

Bucking the trend, leisure-related shares gained after reports Japan could scrap pre-departure COVID-19 testing requirements for travelers and raise daily caps for overseas visitors.

The airline sector was the biggest gainer among the Tokyo Stock Exchange’s 33 industrial sub-indices, up 3.99%. ANA Holdings and Japan Airlines climbed 3.26% and 4.88% respectively.

Department store stocks also rose, with Isetan Mitsukoshi Holdings up 4.47% and J.Front Retailing up 4.56%.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu)