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Japan stocks dive after benchmark bond yield spike

Pamela Sampson, AP Business Writer

A money trader works under a screen indicating the U.S. dollar is traded at 103.08 yen at a foreign exchange company in Tokyo, Thursday, May 23, 2013. The dollar fell to 103 yen level. (AP Photo/Shizuo Kambayashi)

BANGKOK (AP) -- Japan's benchmark stock index has plummeted after a spike in government bond yields and unexpectedly weak Chinese manufacturing spooked investors.

The Nikkei 225 in Tokyo nosedived 7.3 percent to close Thursday at 14,483.98 after a session of volatile trading.

Markets elsewhere in Asia sank after a survey showed China's manufacturing contracted in May.

Japan's 10-year government bond yield rose above 1 percent for the first time in a year, unnerving some investors at a time when Japan's already overburdened government finances are vulnerable to rises in interest rates.