TOKYO: Japanese stocks fell for a second day, with the Topix index headed for its lowest close in about two months, as investors count down to the first U.S. interest-rate increase in almost a decade. Banks were the biggest drag.
The Topix slipped 0.7 percent to 1,517.70 as of 12:42 p.m. in Tokyo, adding to Monday’s 1.4 percent drop and heading for its lowest closing level since Oct. 20. The Nikkei 225 Stock Average slipped 0.6 percent to 18,761.90.
“Investors are focusing on the Fed,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “They want to see what the Fed will announce on the target interest rate at the end of 2016. There’s market consensus that rates will rise this week, but it is unclear what happens after that.”
Megabanks Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. were among the biggest contributors to losses on the Topix, falling at least 1.4 percent. Toyota Motor Corp. sank 0.5 percent. Chemical maker Asahi Kasei Corp., Nisshin Steel Co., Nippon Paper Industries Co. and TDK Corp. all slumped more than 3 percent to lead declines on the Nikkei 225.
Toshiba Jobs
Toshiba Corp. added 0.7 percent after the Nikkei newspaper reported the money-losing electronics maker will cut thousands of jobs in its consumer-products business. Toshiba said it hasn’t made any decision.
E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent after the underlying measure rose 0.5 percent on Monday, surging in the final minutes of trading as a rebound in U.S. crude oil to back above $36 a barrel overshadowed credit-market turbulence and weakness in commodity shares before the Federal Reserve prepares to raise interest rates on Wednesday.
Traders are pricing in 76 percent odds that the Fed will raise rates for the first time since 2006, ending a seven-year era of near-zero borrowing costs. Tightening policy would solidify the Fed’s divergence from other major central banks, with policy makers in Europe and Japan still emphasizing measures to support growth.
The prospects of more expensive cash in the U.S. and a deepening rout in commodities markets have helped erase $2.5 trillion from the value of global equities since Dec. 1.
Bond market anxiety also has caught the attention of equity investors after Third Avenue Management froze redemptions at a high-yield mutual fund last week. Prices on U.S. high-yield bonds kept sinking Monday as London-based Lucidus Capital Partners became the latest fund to liquidate holdings as investors demanded their money back.
