The Nikkei 225 Index Closes 0.42% Lower

The Nikkei 225 Index decreased 277 points or 0.42 percent on Monday to close at 66129 points. The decline was led by Toho Zinc (-7.28%), Mitsubishi Materials (-6.92%) and Japan Steel Works (-5.41%). On the upside, the strongest performers were Tokai Carbon (7.97%), Kansai Electric Power (7.31%) and Casio Computer (5.28%).

Asian equity markets declined on Monday as hawkish remarks from Federal Reserve Chair Kevin Warsh revived expectations for a US rate hike in September. In his Jackson Hole address on Friday, Warsh warned that inflation isn’t meaningfully slowing and reaffirmed policymakers’ commitment to returning inflation to their 2% target. Sentiment was also weighed down by a jump in oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz. Tech-heavy equity benchmarks in Japan and South Korea led the declines, while shares in China and Hong Kong also moved lower.

The Nikkei 225 Index shed 0.14% to close at 66,312 while the broader Topix Index rose 0.23% to 4,156 on Monday, struggling for momentum as hawkish remarks from Fed Chair Kevin Warsh revived expectations for a US rate hike in September. In his Jackson Hole address on Friday, Warsh warned that inflation is not slowing significantly and reiterated the Fed’s commitment to returning inflation to its 2% goal, while noting that financial conditions are not currently restrictive. Sentiment was also pressured by a jump in oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz. Domestically, data showed Japan’s industrial output unexpectedly increased in July, while retail sales growth exceeded forecasts. Technology stocks mostly declined, with Advantest (-4.5%), Terra Drone (-17.8%), Murata (-2.8%) and Disco Corp (-2.1%) posting sharp losses. For the month, the Nikkei and Topix indexes gained 3.03% and 3.82%, respectively.