Japan's Nikkei Share Average Drops to One-Week Low

Japan's Nikkei Share Average Drops to One-Week Low

A slump has been noticed in Japan's Nikkei share average as it dropped to a one-week low on Friday. The drop is attributable to concerns that US interest rates are likely to rise sooner than expected. However, losses were controlled to a great extent by companies such as Sony Corp.

Nikkei was 0.6% down at 15,523, the figure marked the lowest since July 25. The index sought a rise by 0.4% this week and recorded a third consecutive weekly gain.

The JPX-Nikkei Index 400 declined by 0.6% to 11, 659. It was Friday morning when Japan's Nikkei share average witnessed a decline because of concerns that the Federal Reserve is likely to increase interest rates sooner than expected. The expectations of rise in the interest rate were triggered after US labor costs achieved a mark that meant their biggest gain in more than five and a half years in the second quarter.

"The market is very sensitive about the direction of U. S. interest rates now. The data triggered profit-taking since US shares were at record highs and Japan shares werehitting multi-month highs recently. It will likely be ashort-term correction", said Masashi Oda, chief investment officerat Sumitomo Mitsui Trust Bank.

He said that expectations to effectively deal with the impact of a national sales tax hikeenacted in April have been so far boosted by Japanese corporate earnings for the April-June quarter.

Sony leaped up 6.7% to 1,887 yen, which is the highest for it since late April. Also, quarterlyoperating profit doubled for the company as it performed superbly in its games and networks division.

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