Japan's Nikkei falls as JGB yields, yen rise on rate-hike bets

By Junko Fujita

TOKYO, Dec 1 (Reuters) - Japan's Nikkei share average fell on Monday after a four-session winning run, as government bond yields rose and the yen firmed on growing bets of a December interest rate hike.

The Nikkei fell 1.68% to 49,407.31 by the midday break, starting the month on a weak note after the benchmark snapped seven straight months of gains in November. The broader Topix lost 1.01% to 3,344.48.

"There were hardly any big market-moving cues, but the market reacted to rising yields and the yen's gain against the dollar," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

"The market tended not to react to the yen's moves lately, but today's session was different."

Japanese government bond (JGB) yields hit 17-year highs and the yen strengthened, as Bank of Japan Governor Kazuo Ueda's comments fuelled bets that the central bank could hike interest rates as early as this month.

Chip-testing equipment maker Advantest (ADTTF) slipped 4.37% to drag the Nikkei the most. Uniqlo brand owner Fast Retailing (FRCOF) lost 1.58%.

Optic fibre cable maker Fujikura (FKURF) tanked 8.58% to become the top percentage loser on the Nikkei.

Mitsui Kinzoku (XZJCF), a maker of materials for data centres, lost 7.15%.

Meanwhile, banks rose on increasing bets of a BOJ rate hike. Sumitomo Mitsui Financial Group (SMFG) gained 2.75% and Mitsubishi UFJ Financial Group (MUFG) climbed 2.33% to become the top percentage gainers on the Nikkei. Mizuho Financial Group (MFG) gained 1.55%.

All but two of the Tokyo Stock Exchange's 33 industry sub-indexes fell, with energy explorers falling 3.55% to become the worst performer. The bank index jumped 1.96% to become the best performer.

(Reporting by Junko Fujjita; Editing by Subhranshu Sahu)