Japan’s Nikkei tumbled on Thursday as sliding US bond yields fed fears about a US economic slowdown and a deepening downturn globally, putting a dent on cyclical stocks such as exporters.
The Nikkei share average dropped 1.5 per cent to 21,049.94 at the midday break, after falling to as low as 20,974.19 earlier.
Benchmark 10-year Treasury yields fell to 15-month lows on Wednesday, keeping the yield curve inverted in a signal of a future US recession, reports Reuters.
On Wednesday, New Zealand’s central bank stunned markets with a sharp shift to a dovish stance, while the European Central Bank delayed a planned increase in rates in the face of rising global growth risks.
The economic gloom saw Germany sell 10-year debt with a negative yield for the first time since the autumn of 2016.
Exporters were sold off, as the dollar slipped 0.15 per cent to 110.34 yen, although it managed to stay clear of a six-week trough of 109.70 plumbed on Monday.
Tokyo Electron slid 2.4 per cent, Subaru Corp tumbled 3.8 per cent and Hitachi Construction Machinery shed 2.0 per cent.
Renesas Electronics Corp and Rohm Co stumbled more than 5.0 per cent after German chipmaker Infineon cut its 2019 revenue forecast on Wednesday for the second time, which hurt US chip shares overnight.
The Philadelphia SE Semiconductor index dropped 1.5 per cent.
Shippers, which are sensitive to global demand, languished. Mitsui OSK Lines dropped 3.3 per cent and Kawasaki Kisen tumbled 4.6 per cent.
Elsewhere, Gunma Bank dived 7.9 per cent after it cut its net profit outlook for the year ending March to 23.1 billion yen from 28.5 billion yen.
The broader Topix dropped 1.7 per cent to 1,581.53. Declining issues outnumbered advancing ones 1,960 to 155.
