June 28, 2017 / 2:20 AM / a year ago

Nikkei down as techs underperform; financials boosted by higher US yields

* Tech shares fall on weak Nasdaq performance

* Banks and insures outperform

By Ayai Tomisawa

TOKYO, June 28 (Reuters) - Japanese stocks wobbled on Wednesday morning as tech shares were dragged down by falls in their U.S. counterparts overnight, while financials rallied on the back of rising U.S. yields.

The Nikkei share average shed 0.2 percent to 20,181.62 in midmorning trade, while gains in banking stocks and insurers supported the broader Topix, which tacked on 0.1 percent.

U.S. Benchmark 10-year notes dropped 18/32 in price to yield 2.20 percent overnight, up from 2.14 percent late on Monday after Fed Chair Janet Yellen said that it is appropriate to gradually raise rates.

“Yellen’s comment is supporting Japanese financial stocks today, and for the long-term, Japanese stocks are on the rising trend supported by U.S.-led global economic recovery,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

Banks and insurers, which invest in higher yielding products such as foreign bonds, surged 1.8 percent and 1.4 percent, respectively. Mitsubishi UFJ Financial Group gained 2.1 percent, Mizuho Financial Group soared 2.6 percent and Dai-ichi Life Holdings advanced 2.2 percent.

Traders said overall sentiment was subdued as investors remain cautious after a healthcare bill was delayed in the U.S. Senate, raising fresh questions about President Donald Trump’s domestic agenda.

“The news raised worries on overall sentiment and makes it hard for the market to take a firm direction,” said Takuya Takahashi, a strategist at Daiwa Securities.

Tech shares languished after a sell-off in big tech names on the Nasdaq, which tumbled 1.6 percent. Google parent Alphabet fell 2.5 percent after EU antitrust regulators hit the tech giant with a record $2.7-billion fine.

Tokyo Electron Ltd shed 2.0 percent, Advantest Corp declined 1.2 percent and Alps Electric Co dropped 1.1 percent.

The JPX-Nikkei Index 400 advanced 0.2 percent to 14,422.02.

Editing by Shri Navaratnam

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