Japan's Nikkei posts one-month closing low on rate, FX uncertainty

Japan's Nikkei share average fell for a fourth consecutive session on Thursday and posted its lowest close in a month, as uncertainty over interest rates and currencies kept investors away from risk assets.

The Nikkei 225 Index ended 0.17% lower at 64,214.48 after struggling for direction for much of the session. The broader Topix rose 0.5% to 4,102.04.

"Market attention is focused on interest rates and foreign exchange, and uncertainty around those areas is prompting selling in risk assets," said Naoto Takahashi, analyst at Aizawa Securities.

U.S. Treasury yields slipped from multi-year highs overnight, while 30-year Japanese government bond yields dropped as much as 10 basis points on Thursday.

Oil prices edged lower with no signs of fresh strikes in the latest clash between the United States and Iran.

Japan's energy explorer sector slipped 3.26%, making it the worst performer among the Tokyo bourse's 33 sector sub-indexes.

The yen extended gains as investors repriced domestic rate expectations in a more hawkish direction, strengthening 1.24% against the dollar to 156.71.

Japanese chip- and AI-related shares were mixed. Chip-testing equipment maker Advantest fell 0.8% and cable and optical fibre producer Fujikura shed 2.73%, while memory chipmaker Kioxia rose 1.31% and semiconductor equipment maker Tokyo Electron edged 0.36% higher.

Market breadth was positive, with 141 Nikkei constituents rising and 82 falling, but declines in a handful of heavily weighted stocks dragged the benchmark lower.