Tokyo’s stock market experienced a significant downturn on Thursday morning, as the Nikkei Stock Average dropped 662.31 points, or 0.95%, to 69,373.40, falling below the 70,000 mark. The broader Topix index also saw a decline, losing 62.02 points, or 1.49%, to reach 4,092.09. This drop was influenced by investor reactions to overnight losses on Wall Street and a surge in U.S. Treasury yields.
The increase in the 10-year U.S. Treasury yield, which hit 5.36%, its highest level since April 2002, contributed to market concerns. Investors are worried that higher U.S. borrowing costs could negatively impact consumer spending and business investment. In Japan, the benchmark 10-year government bond yield also remained above 3%, further pressuring domestic equities.
The market sentiment was dampened further by geopolitical tensions in the Middle East. Renewed concerns over crude oil supplies arose after Iran-aligned Houthi forces attacked two airports in Saudi Arabia, adding another layer of uncertainty to the global economic outlook.
Most sectors in the Tokyo stock market recorded losses as these factors combined to weigh heavily on investor confidence. The ongoing concerns about rising bond yields and geopolitical instability highlight the challenges faced by markets globally, affecting not only the U.S. and Japan but also broader international economic stability.