The Japan Stock Market close lower

The Japan Stock Market closed lower on Wednesday. Declines in the paper and pulp, rail and bus, and real estate sectors drove the indices down.

At the close in Tokyo, the Nikkei 225 lost 0.58%.

The best performers of the Nikkei 225 were Mitsui Engineering & Shipbuilding (T: 7003). The Japanese company rose 10.61% or 45.0 points to 469.0 at the close. They were followed by Chiyoda Corp. (T: 6366), which advanced 7.31%, or 31.0 points, to close at 455.0, and NTN Corp. (T: 6472), which rose 6.54%, 20, 0 points, until dismissing the session at 326.0.

At the bottom of the index was Japan Steel Works Ltd (T: 5631), which fell 6.11%, 192.0 points, to close at 2,948.0. CyberAgent Inc (T: 4751 ), dropped 5.23%, 380.0 points, and closed at 6,880.0, while Bridgestone Corp. (T: 5108 ) lost 4.13%, 184.0 points, ending at 4,271.0.

Green numbers outnumbered reds on the Tokyo Stock Exchange by a difference from 1941 to 1615, and 191 were flat.

Shares of NTN Corp. (T: 6472 ) rose to a 52-week high, hitting 6.54%, or 20.0, to settle at 326.0.

The Nikkei Volatility, which measures the volatility of options on the Nikkei 225, ended flat, 0% to 22.39.

10-year Treasury yield hit the highest level in a year

On Tuesday, Wall Street indexes closed mostly lower. Losses in technology and health care companies kept gains in energy and other market sectors in check.

According to analysts, rising bond yields, a sign of confidence in the economic outlook and expectations of rising inflation, are weighing on sentiment.

The 10-year Treasury yield rose to 1.30% from 1.29% late Tuesday, the highest level in a year. On higher yields, bank stocks make larger gains. It allows them to change more profitable interest rates on loans. However, utilities and real estate stocks, bond proxies were among the biggest decliners. They can look less attractive when bond yields rise. 

Jingyi Pan, a Senior Market Strategist at IG, stated that rising bond yields might negatively affect equities. Still, a sustained improvement in economic conditions is expected to relieve them. Besides, he mentioned that January retail sales and industrial production remain ones to watch in the session ahead.

Yoshimasa Maruyama, a senior economist for SMBC Nikko Securities, hoped for recovery for Japan. However, he mentioned that the growth pace would slow down next year and the year after that. The vaccine rollout in Japan will prove key for the Japanese economy, he said.