The Japanese Topix index fell sharply by more than 5 %, which is the most recent since the crises of 2011 tsunami, as financial industries plunged amid rising bond yields. Tokyo’s Nikkei 225 slid as much as 6 % as yen gained strongly against the US dollar. Mitsubishi Estate, one of the country’s biggest developers fell by 5.3 %; Mitsubishi Motors sank by 11.5% while sharp dropped by 8.8%.
Hitting a new four-time low, the Japanese yen gained 103.6 per dollar to 102.6 per dollar. Yields on 10-year JGBs hit 1 percent in the opening minutes of Tokyo trading, but fell back to 0.88% later in the afternoon.
The Bank of Japan has put in 2 trillion yen ($19.4bn) of one-year funds into the financial system targeted to develop the rise in the yields of the Japanese government bond. Japanese yen dropped for two days in a row, which marked its weakest in over four years.
The reports released from HSBC and Markit Economics, the Chinese Purchasing Managers’ Index fell to 49.6 from 50.4 in April, which are believed to be the cause of the drop in exporters. The Shanghai Composite was flat, while Hang Seng index, Taiwan Weighted index and ASZ200 fell 1.7%.
According to Mr Bernanke, the Fed could slow down the pace of its assets purchases in the next few meetings but only if the rate of unemployment decreased and labor market improves
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