Japanese Stocks Fall From Four-Month High as Global Shares Slide

  • Investors await Fed minutes as odds of a U.S. rate hike jump
  • Hisamitsu Pharmaceutical slumps after first-half profit

Building Towards a Possible Fed Rate Hike in December

Japanese shares declined from a four-month high, joining a global selloff amid concerns over higher U.S. interest rates and a weak earnings season.

The Topix index fell 1 percent at the close in Tokyo Wednesday, with financial stocks and exporters dragging the measure down the most. Oil fell from its highest level in more than a year after Russia’s largest producer said it won’t cut output, casting doubt over the nation’s willingness to join OPEC efforts to stabilize prices.

“U.S. shares have fallen and the slightly risk-off moves globally have continued on to the Japan market,” said Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo. “Stocks have risen and the yen had weakened quite a bit so we’re seeing some of that unwind.”

SecurityPercent ChangePrice
Topix-1%1,342.35
Nikkei 225-1.1%16,840.00
Yen-Dollar-0.1%103.59

Investors sold global risk assets as they await September meeting minutes from the Federal Reserve on Wednesday for evidence Chair Janet Yellen is under pressure from hawkish officials to tighten policy soon. Odds of a U.S. rate hike by year-end have ticked up to 67 percent amid speculation the recent surge in oil prices will fuel inflation.

Demand for riskier assets was also damped as Alcoa Inc. tumbled after positing earnings that missed estimates, while Illumina Inc., a maker of genetic-sequencing machines, said sales were lower than expected. The disappointing corporate results helped send the S&P 500 Index down 1.2 percent on Tuesday. Futures on the U.S. measure added less than 0.1 percent on Wednesday.

“We’ll have to see other earnings, but generally there’s a feeling that the U.S. recovery is slowing down a little,” Ishigane said.

Crude held above $50 after falling 1.1 percent Tuesday. Russian oil producer Rosneft PJSC said it won’t reduce output, according to Reuters. President Vladimir Putin had earlier said his nation would join the Organization of Petroleum Exporting Countries in freezing or cutting supply.

Exporters, which are sensitive to gains in the yen, were among the biggest drags on the Topix, while banks also weighed on the gauge. Sumitomo Mitsui Financial Group Inc. dropped 2.1 percent, while Toyota Motor Corp. declined 1 percent.

  • Hisamitsu Pharmaceutical Co. slumped 4.2 percent after it said first-half operating profit fell 11 percent from a year earlier.
  • PC Depot Corp. surged 8.4 percent after a drop in the personal-computer seller’s September sales were seen as a bottom by some investors expecting a rebound.
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