Nikkei Slumps as Fed Hike Bets and Oil Prices Send Shockwaves Through Markets

Japan's Nikkei 225 gauge fell 1.93% on Friday, closing at 64,011.34, as concerns over US rate hikes and soaring oil prices fueled inflation worries.

The broader Topix slipped 0.65% to 4,028.30.

US equities retreated overnight after higher Treasury yields and August producer-price data heightened expectations for a Federal Reserve rate hike.

Fed Chair Kevin Warsh has signaled a shift away from forward guidance, keeping investors alert to upcoming inflation figures.

Takuma Ikemoto, market analyst at Tokai Tokyo Intelligence Lab, said 'With Fed Chair Warsh signalling a focus on curbing inflation, a wait-and-see stance is likely to strengthen in the Japanese stock market.'