Tokyo stocks open lower with eyes on US Fed's minutes

TOKYO: Tokyo stocks opened lower on Wednesday, extending US falls as investors awaited minutes from a US Federal Reserve meeting for clues over future monetary policy.

The benchmark Nikkei 225 index was down 0.94 percent, or 261.47 points, at 27,526.51 in early trade, while the broader Topix index slipped 0.78 percent, or 15.30 points, to 1,933.82.

The Japanese market this week "will likely see ups and downs on news about monetary policy" as investors eye the minutes of the Fed's meeting, due later in the day, for clues on the central bank's future policy, Okasan Online Securities said in a note.

Wall Street stocks finished sharply lower following hawkish comments from a top Federal Reserve official that boosted expectations for more interest rate hikes.

Saying inflation must be reined in, Fed Governor Lael Brainard warned the US central bank was "prepared to take stronger action" if warranted and could move to reduce the Fed's massive bond holdings as soon as its May meeting.

Tokyo stocks open higher tracking US gains

Brainard's comments "have markets attuned to further clues on timing and sizing of balance sheet runoff," economist Taylor Nugent of National Australia Bank said in a note.

The Brainard remarks helped lift the yield on the 10-year US Treasury note above 2.5 percent, well above where it was throughout the Covid-19 pandemic.

The dollar changed hands at 123.72 yen in early Asian trade, against 123.60 yen in New York late Tuesday.

Among major shares in Tokyo, Sony Group dropped 1.85 percent to 12,480 yen, Toyota was off 1.56 percent at 2,183 yen, and SoftBank Group was down 1.94 percent at 5,821 yen.

Honda was off 1.37 percent at 3,389 yen after the Japanese carmaker and US giant General Motors said they will expand their tie-up with plans for "codeveloping a series of affordable electric vehicles."

Mitsubishi Motors was down 1.85 percent at 318 yen after a report it will suspend production at a domestic plant for five days next week, due to a delay in parts delivery caused by the Covid-19 lockdown in Shanghai.