Tokyo stocks slip on lingering inflation concerns, ex-dividend selling

Tokyo stocks slipped on Tuesday for the second consecutive day, driven by rising inflation concerns and ex-dividend selling. The Nikkei Stock Average fell 396.35 points, or 0.60%, to 65,481.27, while the Topix index dropped 70.87 points, or 1.72%, to 4,041.13. The decline was particularly notable in the Prime Market, with securities houses, oil and coal products, and iron and steel issues leading the downward trend.

U.S. dollar traded in the lower-to-mid 157 yen range, pressured by concerns about further U.S. Federal Reserve rate hikes amid high crude oil prices and restrained optimism that Japanese authorities might prevent excessive yen devaluation. Rising crude oil prices, which remained above $90 per barrel, fueled selling pressure on Tokyo stocks as investors worried about escalating costs for businesses.

The 10-year Japanese government bond yield also breached the 3% mark, suggesting higher borrowing costs for consumers and companies.

SoftBank Group suffered among the biggest losers, following a sharp decline in the U.S.-listed shares of its chip design subsidiary Arm Holdings, after gaining on Monday as investors capitalized on interim dividend payouts.