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Japanese stocks tumble in line with Wall Street after U.S. inflation data

Japanese stocks tumble in line with Wall Street after U.S. inflation data

Reuters · 09/13/2022 23:07
Japanese stocks tumble in line with Wall Street after U.S. inflation data

By Sam Byford

- Japanese stocks fell on Wednesday, tracking overnight Wall Street losses after U.S. inflation data showed an unexpected rise in consumer prices last month.

The Nikkei share average .N225 fell 2.95% to 27,795.64 shortly after markets opened, slipping below the key psychological 28,000 level, before recovering slightly to 27,991.82 at the break, down 2.18% for the day.

The broader Topix index .TOPX was down 1.62%.

Technology stocks led the losses on the Nikkei, with the sector down 2.15% overall after a selloff in the U.S. saw the Philadelphia semiconductor index .SOX slide 6.18%.

SoftBank Group Corp 9984.T fell 3.80%, and chipmaking equipment manufacturer Tokyo Electron 8035.T slipped 3.05%.

"The selloff of high-priced tech stocks in Japan seems to be connected [to the overnight U.S. losses]," a market participant at a domestic financial institution said.

Investors had been awaiting the overnight release of U.S. Consumer Price Index (CPI) data for clues, as to how hawkish the Federal Reserve will be in its efforts to cool inflation.

The report showed CPI edged up 0.1% last month despite consensus expectations for a decrease, sending Wall Street to its biggest loss in two years.

Markets are fully pricing in a third successive rate hike of at least 75 basis points at the Fed's meeting and see a 38% probability of a highly aggressive 100 bps. FEDWATCH

Of the Nikkei's 225 constituents, 205 declined, 18 advanced, and two traded flat.

Some travel-related companies saw gains amid broader expectations that Japan will further ease COVID-19 visa restrictions for tourists.

Department store giant Takashimaya Co Ltd 8233.T rose 0.89%, while peer Isetan Mitsukoshi Holdings Ltd 3099.T was flat after making early gains.

"Stocks that benefit from the loosening of coronavirus restrictions will probably continue to be stable," said a domestic asset manager.

(Reporting by Sam Byford and Tokyo markets team; Editing by Rashmi Aich)