The Japanese stock market experienced a decline on the first trading day of 2025, driven by growing concerns over increasing borrowing costs. The Nikkei Index dropped by 1.5% to close at 39,307.05 points.
Automotive and retail sectors were the hardest hit, with Toyota Motor (TM, Financial) shares falling by 4.3% and Fast Retailing shares declining by 4.2%. This downturn reflects investor apprehension regarding the impact of higher interest rates on corporate profits and consumer spending.
In the bond market, the yield on the 10-year Japanese government bond rose by 3.5 basis points to 1.125%, reaching its highest level since July 2011. This increase in yield indicates a shift in investor sentiment as they anticipate tighter monetary policy.
On the currency front, the US dollar was trading at 157.69 against the Japanese yen, compared to 157.30 in New York late last week. This exchange rate movement suggests a strengthening of the dollar amid global economic uncertainties.
