Tokyo stocks retreated Friday as exporter shares slid on a stronger yen amid speculation the Bank of Japan may raise interest rates this month.
The Nikkei Stock Average dropped 536.55 points, or 1.05 percent, to close at 50,491.87 after briefly falling more than 800 points. The broader Topix index lost 35.65 points, also 1.05 percent, to finish at 3,362.56.
The yield on Japan’s benchmark 10‑year government bond climbed to 1.950 percent, its highest since July 2007, after BOJ Governor Kazuo Ueda signaled the possibility of a rate hike earlier this week.
The U.S. dollar slipped to the lower 154 yen level in Tokyo trading after Bloomberg reported the BOJ is prepared to raise rates and signal further increases if its economic outlook holds.
Analysts said exporter shares were pressured by the yen’s appreciation, which cuts into overseas profits. Rising yields also reflect concern that Japan’s fiscal health could worsen under Prime Minister Sanae Takaichi’s economic policy, which includes aggressive spending.