Japan stocks fall as bond yields and fiscal concerns rise

Japan?s stock market came under pressure on Tuesday, with the Nikkei 225 falling 2.54% to close at 67,461. The decline reversed the previous session?s gains as rising global bond yields and inflation worries weighed on investor sentiment.

Japan?s 10-year government bond yield climbed to around 2.95%, its highest level in three decades. Concerns over higher government spending and the growing possibility of a near-term Bank of Japan rate hike added to the pressure.

Investors were also worried about the government?s plan to cut the consumption tax on food to 1% for two years. With no clear alternative source of revenue yet identified, the move has raised concerns about Japan?s fiscal position.

Technology and consumer stocks led the decline. Kioxia fell 7.6%, Taiyo Yuden dropped 11.5%, Murata declined 9.6%, while Fast Retailing and Sony Group fell 2.3% and 1.6%, respectively.

In corporate news, Situational Awareness sold part of its stake in Japan?s Taiyo Yuden to Citadel and other investors this month, significantly reducing its position in the company.

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