Japan stocks closed lower amid a strong yen and concerns in the US banking sector

Japanese stocks closed lower on Monday as investors sold stocks as the yen rose against the dollar and concerns about the US banking sector persisted.

The Nikkei index fell 0.71 percent to 28,949.88 points, closing below the 29,000 level for the first time since April 28.

The index hit its highest level since January 2022 last Tuesday before the market closed due to a three-day holiday.

The broader Topix index fell 0.21 percent to 2,071.21 points.

“The market fell today, partly due to the strength of the yen, but investor sentiment was also weak as the Dow Jones index ended lower on Friday compared to the start of the holiday in Japan,” said John Morita, general manager of research at Shibagen Asset Management.

“There are also ongoing concerns about the collapse of another bank in the United States,” he added.

The yen rose against the dollar last week after the Federal Reserve hinted at halting the monetary tightening cycle.

Shares of oil exploration companies lost 1.71 percent, becoming the worst performer among 33 sub-indices on the Tokyo Stock Exchange, followed by the banking sector, which fell 1.27 percent.

Fast Retailing, which owns the Uniqlo brand, fell 3.13 percent, becoming the biggest loser on the Nikkei index. Technology investor SoftBank Group fell 0.97 percent.

While Itochu shares rose 1.35 percent, Marubeni shares fell during the session after a decline in full-year profit expectations, but it later recovered, rising 0.1 percent.