Nikkei Retreats from Six-Week High Amid Global Market Jitters
Japan's Nikkei 225 benchmark index retreated from its six-week high on Friday as investors locked in gains and grew cautious about interest rates, inflation, and geopolitical risks. The index slid 0.94% to close at 68,309.46, reducing its weekly advance to 2.9%. The broader Topix slipped around 1% to 4,091.00.
The decline came despite the US stocks ending higher overnight as Treasury yields retreated from multi-decade highs. However, investors remained focused on the Federal Reserve's rate trajectory and inflation risks. Japan's core inflation in Tokyo accelerated in September at its fastest pace in 10 months, supporting the case for further rate hikes.
Geopolitical tensions also weighed on the market, with the US-Iran conflict in the Middle East and China's suspension of oil product exports beyond Hong Kong and Macau. Analyst Yuta Okamoto from Tokai Tokyo Intelligence Laboratory noted that concerns about short-term overheating could lead to profit-taking, but also expressed a positive outlook for domestic shares.
The Bank of Japan's tankan survey released on Thursday showed sentiment among large manufacturers rose for the sixth consecutive quarter. The largest decliners in the Nikkei 225 were SoftBank Group, Nissan Motor, and Terumo, while Resonac Holdings, Furukawa Electric, and Baycurrent saw notable gains.