Nikkei slumps to six-week lows after Yellen's rate comment jolts markets

Japanese stocks tumbled to a six-week low on Thursday after Federal Reserve Chair Janet Yellen raised the prospect of interest rate hikes starting earlier than previously thought, sparking a selloff in equities before a three-day weekend.

The Nikkei share average ended 1.7 per cent lower at 14,224.23, the lowest closing level since February 6. For the week, the index dropped 0.7 per cent. Markets in Japan will shut on Friday for a public holiday.

On Wednesday, Yellen said the Fed might end its bond-buying program this fall, and could start to raise interest rates around six months later, earlier than most analysts had anticipated.

The broader Topix index dropped 1.6 per cent to 1,145.97.

The JPX-Nikkei Index 400, a gauge comprising firms with high return on equity and strong corporate governance, was down 1.4 per cent at 10,390.25.

Copyright: Thomson Reuters 2014