By Kevin Buckland
TOKYO, March 2 (Reuters) - Japan's Nikkei share average
flipped to a small loss in morning trading on Thursday, weighed
down by a disappointing Tesla investor day and the risk of a
more hawkish Federal Reserve.
The Nikkei lost 0.08% to 27,495.69 by the lunch
break, reversing early gains of as much as 0.37%, although the
benchmark index remained around the middle of its trading range
of the past five weeks.
Tech was among the worst performing sectors, along with
rate-sensitive real estate. Utilities were at the bottom,
slumping 1.3%.
The broader Topix slid 0.11% to 1,996.61, with an
index of growth shares down 0.32% versus a small gain
for value shares .
Tesla shares slumped more than 5% in extended
trading, dragging down U.S. stock index futures, after a highly
anticipated plan for an affordable EV failed to materialise.
Investors were also spooked by a jump in U.S. Treasury
yields to multi-month highs above 4% in Tokyo
trading, as Fed officials sparred over whether high rates for
longer would be enough to tame stubborn inflation or more
aggressive tightening was needed.
Minneapolis Fed President Neel Kashkari said he was inclined
"to push up my policy path" after a recent government report
showed the Fed's preferred inflation index accelerated in
January to a 5.4% annual rate, more than double the Fed's 2%
target. Fed officials will submit new projections at a
rate-setting meeting in three weeks.
S&P 500 E-mini futures were last down 0.4% and
Nasdaq futures were 0.54% lower.
"There's no let-up in the hawkish lean in tone from Fed
speakers of late," said Maki Sawada, a strategist at Nomura
Securities in Tokyo.
"There's a fairly high probability that (Fed Chair Jerome)
Powell will also adopt a relatively hawkish stance at this
month's policy meeting that could rein in stock gains."
Chipmaking equipment giant Tokyo Electron was the
Nikkei's biggest drag, shaving off 26 points with a 1.62% slide.
At the other end, Uniqlo store operator Fast Retailing provided the most support, adding 56 points with a
2.05% advance.
(Editing by Subhranshu Sahu)
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