TOKYO: Japan’s Nikkei share average fell on Monday, hit by losses in US shares after dismal corporate earnings soured the mood and as worries about slowing global growth capped the risk appetite.
The Nikkei share average dropped 0.8 per cent to 20,377.45 points by mid-morning, falling below its 25-day moving average of 20,420.36 for the first time in two weeks.
The S&P 500 and Nasdaq had posted their largest weekly drops since March on Friday, while weaker equities in turn helped push US Treasury yields further down.
“Investors are concerned that the Fed may raise the rates while there is question on whether its economy is strong enough to accommodate that,’’ said Masashi Oda, senior investment officer at Sumitomo Mitsui Trust Bank.
The Fed’s rate-setting Open Market Committee meets on Tuesday and Wednesday and is considered highly unlikely to lift interest rates just yet, though it does still seem set on a move in September.
Global economy started the second half of the year on a shaky ground with China’s factory sector activity contracting in July at the fastest pace in 15 months and euro zone manufacturing weaker than expected, although US activity picked up.
