Japan's Nikkei fell 3.11% as oil prices surge and US rate hike fears rise
Japanese equities dropped sharply on Friday, driven by soaring oil costs and expectations of a potential U.S. Federal Reserve interest-rate increase.
Japan's benchmark Nikkei 225 share average fell 3.11% to 63,243.98 in early trading on Friday. The decline came as renewed concerns over a U.S. interest-rate hike intensified inflation worries alongside a surge in oil prices linked to tensions between the United States and Iran. U.S. equities also fell overnight after rising Treasury yields strengthened expectations that the Federal Reserve could raise rates soon. Fed Chair Kevin Warsh has indicated a shift away from forward guidance, leaving markets focused on upcoming American inflation data.
Global pressure weighed heavily on metal stocks as well. Shares of companies including Vedanta, NALCO, and Hindustan Copper declined up to 5% on Friday. The yield on the U.S. 10-year Treasury bond climbed above 4.9%, its highest level since 2023, while oil costs raised transportation and energy expenses for mining operations. Higher bond yields and a stronger U.S. dollar created a challenging environment for commodity production by squeezing demand and profitability simultaneously.
