Nikkei Retreats as Investors Lock in Gains Amid Interest Rate Concerns
The Nikkei 225 index in Japan retreated on Friday from its six-week high as investors locked in their gains and turned cautious due to concerns about interest rates, inflation, and geopolitical risks.
The benchmark index slid 0.79% to 68,413.03, still tracking for a 3% advance on the week.
The broader Topix slipped 0.57% to 4,108.53. US stocks had ended higher overnight as Treasury yields retreated from multi-decade highs, but overall market tone remained choppy with investors focused on the Federal Reserve's rate trajectory and inflation risks.
Data showed core inflation in Tokyo accelerated in September at its fastest pace in 10 months, bolstering the case for further rate hikes. Geopolitical tensions also weighed, with the US-Iran conflict in the Middle East and fresh disruptions to global energy markets after China suspended oil product exports beyond Hong Kong and Macau.
Despite concerns about short-term overheating leading to profit-taking, the outlook for domestic shares remains positive, according to Yuta Okamoto of Tokai Tokyo Intelligence Laboratory. This is supported by the Bank of Japan's tankan survey released on Thursday showing sentiment among large manufacturers rose for a sixth straight quarter.