TOKYO: Japan stocks fell for a third day, extending a slump in global equities amid speculation the Federal Reserve is moving closer to raising interest rates.
The Topix Index dropped 0.5 per cent to 1,516.77 as of 9.04am in Tokyo, with all but four of its 33 industry groups declining. The Nikkei 225 Stock Average lost 0.3 per cent to 18,605.29. The dollar surged to the strongest level against the euro in almost 12 years as the US benchmark stock gauge slumped yesyerday, erasing all its gains this year.
“The prospects for higher US interest rates and a stronger dollar have gone up rapidly, and now we’re seeing concerns brewing whether US earnings can stand up to that,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. in Tokyo. “If the US economy begins slowing down, that’ll be felt in Japan as well.”
Federal Reserve Bank of Dallas President Richard Fisher said the central bank should begin to raise rates as the labor market improves. While policy makers from Sydney to Frankfurt are cutting rates to stimulate growth, the Fed stands out in accepting a higher exchange rate as a sign of economic strength. Friday’s jobs report showed employers hired more workers than economists’ had forecast.
