Japan’s Nikkei closes at its lowest level in two months

The Japanese Nikkei index ended trading on Tuesday at its lowest level in two months, and the yield on government bonds for ten years recorded the highest rise in seven years, after the central bank surprised investors by allowing a hike in long-term interest rates.

The Nikkei fell 2.46 percent to close at 26,568.03 points, the lowest level since October 13, in the biggest daily decline since October 11.

The broader Topix index fell 1.54 percent to 1905.59 points.

The yield on 10-year Japanese government bonds rose 21 basis points to 0.460 percent, the highest level since 2015.

Chipmaker Tokyo Electron fell 3.53 percent and Advantest fell 2.98 percent. Technology investment group SoftBank fell 4.85 percent, being the biggest losers in the Nikkei.

However, the banking sector rose on Tuesday 5.12 percent, indicating a relief for investors from the Bank of Japan’s decision after years of pressure on very low interest rates on the sector’s main gains from loans and deposits.