Nikkei index is falling amid expectations of more monetary tightening in America

Japan’s Nikkei closed lower on Monday, guided by Wall Street, as investors expect US interest rate hikes to continue for a longer period after a batch of strong economic data.

The index fell by 0.59 percent, before recovering some of its losses, and closing down 0.11 percent at 27,423.96 points. The index continued to be near the middle of its trading range in the past month.

Technology stocks were among the biggest losers, given their sensitivity to interest rate hikes.

The broader Topix index rose 0.22 percent to 1,992.78, after starting the session lower.

Maki Sawada, strategist at Nomura Securities, said that in the near term, “it is difficult to expect a development that will push the Nikkei back to the 28,000 level,” expecting the index to remain confined to its recent range, which reached around 27,500 points this week.

But she added, “It does not seem that the market will witness a significant decline from this level unless some news is received.”

Shares of automakers generally increased, as Honda and Nissan shares rose slightly, while Toyota shares fell.

Sony shares rose 0.4 percent, while Nintendo shares fell 1.87 percent after the downgrade of its rating at Citi.