Japanese stocks end lower on hawkish tone from US Fed, financial stocks rise

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TOKYO, June 17 (Reuters) – Japanese stocks closed lower on Thursday as investors sold tech and pharmaceutical stocks following weakness on Wall Street after the US Federal Reserve signaled earlier-than-expected rate hikes , while the financial sector shone thanks to rising US Treasury yields.

The Nikkei stock average ended down 0.93% to 29,018.33, while the broad Topix fell 0.62% to 1,963.57.

The three major Wall Street indices all fell overnight after the Fed revealed it expected its first post-pandemic interest rate hike to be in 2023, a year earlier, citing an improvement in the health situation in the middle of the vaccine deployment.

“Investors appear to be overreacting to the Fed’s announcement and to the declines in US stocks,” said Shoichi Arisawa, managing director of the investment research department at IwaiCosmo Securities.

“But that’s understandable, as the US market could drop again tonight as the market may not have fully digested the Fed’s announcement, which was made just before the close.”

The biggest drag on Nikkei was tech startup investor SoftBank Group, down 1.4%, followed by medical platform services firm M3, which fell 3.61%. The Sony group put pressure on the Topix by losing 2.34%.

Insurers and banks advanced, with T&D Holdings gaining 3.11%, making it the biggest winner on the Nikkei. Dai-ichi Life Holdings rose 2.54%.

Mitsubishi UFJ Financial Group gained 1.18% and Sumitomo Mitsui Financial Group gained 0.84%.

Toshiba, which is facing a corporate governance crisis, added 1.26% after the Wall Street Journal announced its chairman said he could step down after reshuffling its board and appointing a new one. CEO. (Reporting by Junko Fujita; Editing by Shailesh Kuber)


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