TOKYO, Dec. 5 (Xinhua) -- Tokyo stocks retreated Friday, weighed down by selling of exporter shares as the yen strengthened on speculation the Bank of Japan (BOJ) may lift interest rates this month.
The 225-issue Nikkei Stock Average ended down 536.55 points, or 1.05 percent, from Thursday at 50,491.87, after briefly dropping over 800 points. The broader Topix index finished 35.65 points, or 1.05 percent, lower at 3,362.56.
The yield on the benchmark 10-year Japanese government bond hit 1.950 percent, its highest level since July 2007, maintaining an upward trend after BOJ Governor Kazuo Ueda signaled the possibility of a rate hike earlier this week.
The U.S. dollar fell to the lower 154 yen level from the upper 154 yen range in Tokyo after Bloomberg reported the central bank is ready to increase the policy rate and will also indicate it will continue to raise rates if its economic outlook is realized.
The market was pressured by selling of exporter shares on the yen's appreciation, which reduces exporters' overseas profits when repatriated.
In addition to expectations about the BOJ's rate hike, higher yields likely reflect growing concern that Japan's fiscal health could worsen under Prime Minister Sanae Takaichi's economic policy, accompanied by aggressive fiscal spending, analysts said. ■
