TOKYO, March 5 (Reuters) – Japanese shares fell for a second straight session on Friday, dragged down by losses in index heavyweights and technology shares, as rising U.S. bond yields hit investor sentiment.
The Nikkei share average edged down 0.23% to 28,864.32 and recorded its second straight weekly loss. The broader Topix closed 0.61% lower at 1,896.18.
The declines followed a weaker overnight finish on Wall Street that left the Nasdaq down nearly 10% from its February record high, as remarks by Federal Reserve Chair Jerome Powell failed to calm investors worried about rising longer-term U.S. bond yields.
U.S. Treasury yields jumped during U.S. trading hours after Powell’s speech, sending the 10-year yield to top 1.5%.
“The move of the U.S. long-term bond yields is now the centre of the attention for stock investors,” said Yoshihiro Takeshige, general manager at the investment management department of Asahi Life Asset Management.
“If the move of yields will become out of control, Japan’s market could be dragged lower, led by declines in U.S. technology shares.”
Fast Retailing – the operator of Uniqlo clothing stores – fell 3.39% and was the biggest drag on the Nikkei. Staffing agency Recruit Holdings declined 6.34%.
Chip-related stocks, which have driven this year’s rally, were also lower. Tokyo Electron fell 2.47%, while Advantest and Fanuc lost 1.27% and 0.94%, respectively.
Toshiba surged 6.06% as Mizuho Financial Group built a 5.07% stake in the energy and infrastructure services firm, following a disclosure of a 5.21% stake by investment fund BlackRock Inc.
The largest percentage gainer on the index was Ricoh , which rose 8.59%, followed by Citizen Watch, up 7.47%, and Casio Computer, which firmed 4.55%.
The biggest percentage loser on the index was Hitachi Zosen , down 7.5%, followed by Recruit and Pacific Metals Co Ltd, which fell 6.25%.
There were 145 advancers on the Nikkei index against 76 decliners.
Reporting by Junko Fujita; Editing by Aditya Soni