TOKYO, Jan 18 (Reuters) - Japanese shares reversed course to
trade lower on Tuesday, as a jump in U.S. bond yields made
investors cautious, prompting a sell-off in market heavyweights.
The Nikkei share average was down 0.6% to 28,158 by
0448 GMT, after rising as much as 0.9% earlier in the session.
The broader Topix lost 0.78% to 1,971.27.
"Sentiment was weakened by rising U.S. Treasury yields.
Investors thought the U.S. market would fall this evening," said
Shoichi Arisawa, general manager of the investment research
department at IwaiCosmo Securities, adding mixed messages from
the Bank of Japan after its policy meeting also weighed.
The Bank of Japan upgraded its inflation forecasts and
flagged heightening chances the recent commodity-driven price
hikes will broaden, the latest sign of its conviction Japan is
emerging sustainably out of deflation.
U.S. Treasury yields jumped along the curve during Asian
trading hours, lifting the shorter end to new pandemic highs, as
traders braced for the possibility of a hawkish surprise from
the Federal Reserve.
Benchmark 10-year yields rose more than 6 basis
points to 1.8550% and Fed funds futures dived as markets baked
in a hike in March and three more by the end of the year.
Uniqlo clothing store owner Fast Retailing cut its
gains, while chip-making equipment maker Tokyo Electron
reversed its course to lose 0.21%. Technology start-up investor
SoftBank Group also gave up its gains to fall 0.22%.
(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips
and Subhranshu Sahu)