TOKYO — Japan’s benchmark Nikkei Stock Average dropped to a one-month low on Monday morning after indications that the U.S. Federal Reserve could move away from ultra-easy monetary policies sooner than expected.

The Nikkei index at one point fell over 1,000 points, or 3.5%, to reach its lowest level since May 20. The benchmark declined below the 28,000 mark with shares in 97% of the index’s 225 companies trading lower. The broader Topix index was down over 2% while the startup-heavy Mothers market fell 1.6%.

Tokyo’s fall tracks a retreat by Wall Street’s main indexes last week, with the Dow Jones Industrial Average declining over 500 points, or 1.6%, on Friday.

The sell-off in stocks accelerated after remarks from St. Louis Federal Reserve President James Bullard on Friday that an initial rate increase could happen in late 2022 as inflation risks rise.

Forecasts from the Federal Open Market Committee earlier last week suggested that its first post-pandemic interest rate hike could come in 2023.

Investors have reacted strongly to the possibility of rate rises sooner than has been expected. In March, the Fed had signaled there would be no rate hike until at least 2024…. CLICK for complete article