Nikkei Edges Lower as 10-Year Yield Hits 3%

Tokyo stocks ended mixed on September 1, with the Nikkei 225 closing at 66,215.34, down 96.59 points, or 0.15%, as rising bond yields and weakness in semiconductor shares weighed on the index.

The broader TOPIX rose 25.57 points, or 0.62%, to 4,181.86 for its ninth straight gain. The Nikkei opened sharply lower after U.S. stocks fell overnight on higher oil prices and rising interest-rate expectations.

The 10-year JGB yield briefly reached 3% for the first time since September 1996, marking a major psychological shift after decades of ultra-low interest rates. This sent a clear signal to equity investors, households, banks, and policymakers.

The rise in yields reflected several pressures at once: persistent inflation, the yen's weakness near 160 to the dollar, expectations that the Bank of Japan will raise rates again soon, and concern over Japan's fiscal position as ministries submit large budget requests for the next fiscal year.