Japanese stocks weakened this morning as investor sentiment remained fragile. The market was dragged down by renewed concerns after Donald Trump threatened tariffs against European allies, while Japanese government bond (JGB) yields remained volatile, making investors increasingly cautious.

The Topix index fell 1.3% to 3,580.19 at 9:12 a.m. Tokyo time. Meanwhile, the Nikkei 225 fell 1.2% to 52,339.27, indicating widespread selling pressure since the opening.

According to Kazunori Tatebe, chief strategist at Daiwa Asset Management, cyclical and high-beta stocks are potentially the most vulnerable because they are highly sensitive to the index's direction. He believes the US - Europe trade tensions over Greenland, coupled with the previous Japanese harvest, are a negative combination for the stock market.

Selling pressure also spread to growth stocks, including the semiconductor sector. The decline in major US technology stocks and concerns about rising yields prompted investors to reduce positions in stocks that typically move aggressively when the market changes direction.

Cyclical stocks such as banking, automotive, and machinery also weakened. Investors tended to hold back as bond volatility increased funding costs and growth prospects.

At the issuer level, Mitsubishi UFJ Financial Group Inc. was the largest contributor to the Topix decline, falling 2.6%. Of the 1,664 stocks in the index, only 129 rose, while 1,499 fell and 36 remained unchanged indicating the dominance of selling pressure in the market. (asd) [sma]

Source : Newsmaker.id