Japan's Nikkei slides as higher yields and oil prices hit sentiment

The Nikkei 225 fell 2.85% to 64,325 on Wednesday, reaching a four-week low as rising global bond yields and oil prices put pressure on Japanese stocks.

Oil prices rose for a third straight session as tensions between the US and Iran increased concerns about inflation and energy supplies. Higher inflation fears pushed bond yields higher, with Japan?s 10-year government bond yield reaching 3% for the first time since 1996.

Expectations of a Bank of Japan rate hike also weighed on sentiment. Governor Kazuo Ueda said policymakers need to pay closer attention to rising price risks, strengthening expectations of a possible rate increase later this month.

Technology and AI-related stocks led the decline. Advantest fell 2.5%, Fujikura dropped 3.9%, Taiyo Yuden lost 4.6%, Tokyo Electron declined 3.4%, and SoftBank Group slid 6.4%. Financial, consumer and industrial stocks also recorded notable losses.

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