The Nikkei stock index on Thursday fell to finish at around a one-month low after briefly sinking over 2 percent on concerns over the adverse impacts of the recent upward trend in long-term interest rates in Japan.
The 225-issue Nikkei Stock Average ended down 502.74 points, or 1.30 percent, from Wednesday at 38,054.13, its lowest level since April 26. The broader Topix index finished 15.42 points, or 0.56 percent, lower at 2,726.20.
On the top-tier Prime Market, decliners were led by mining, marine transportation and nonferrous metal issues.
The yield on the benchmark 10-year Japanese government bond at one stage rose 0.025 percentage point from Wednesday's close to 1.100 percent, its highest level since December 2011, according to Japan Bond Trading Co., an inter-dealer bond broker.
It has recently been on an upward trend amid speculation that the Bank of Japan will continue reducing bond purchases as it moves toward further policy normalization.
The U.S. dollar was mostly in the lower 157 yen range after briefly climbing to a one-month high of 157.71 overnight in New York, as long-term Treasury yields advanced amid receding expectations of interest rate cuts by the Federal Reserve at an early date, dealers said.
Stocks were in negative territory throughout the day, with the Nikkei index at one point sinking over 900 points. The recent rise in the yield for the benchmark government bond has fueled worries over higher borrowing costs, analysts said.
"The rise in the yield dampened hopes for (growth in) corporate profits," said Koichi Fujishiro, senior economist at the Dai-ichi Life Research Institute.
Technology issues led losses on equities after a fall in their U.S. counterparts overnight, while a decline in U.S. stock futures also dented sentiment, analysts said.
But the market trimmed losses in the afternoon as investors scooped up bargains after the Nikkei benchmark fell below the 38,000 threshold, he added.
