Selling in Tokyo sours sentiment Thursday 10:20 BST. Stocks and the dollar are struggling as the market continues to absorb adjusted expectations for the duration of Federal Reserve support and sentiment is hit by another heavy burst of selling in Tokyo. Gold has broken back above $1,400 an ounce and highly-rated sovereign bond prices are inching higher, nudging yields lower, as risk appetite fractures. The FTSE All-World equity index, which last week hit an intraday near five-year high of 252, is down 0.3 per cent to 243.9 as the FTSE Eurofirst 300 inches up 0.1 per cent and US index futures suggest Wall Street's S&P 500 will fall another 3 points from its two-week closing low of 1,648. Investor optimism has taken a knock from another turbulent day in the Japanese stock market. The Nikkei 225 has fallen 5.2 per cent after a firming yen encouraged heavy "profit-taking." Just six sessions ago the Nikkei was sitting at a five-and-a-half year high, having gained more than 75 per cent since mid-November, as investors bought into the idea that the Bank of Japan could reflate the world's third-biggest economy via a huge monetary boost. Exporting stocks rose as the BoJ's policy was seen weakening the yen, which softened to nearly Y104 against the US dollar. The rally coincided with new records for Wall Street as global investors welcomed the continuing largesse of the Fed, too. But the Fed has since alluded to the prospect that its $85bn-a-month asset purchase programme may soon be reduced, while recent rises in US and Japanese bond yields have reduced the relative attraction of stocks. After touching a 13-month high of 2.23 per cent on Wednesday, the US 10-year Treasury is down 1 basis point to 2.11 per cent, helped by the broader market caution. Japanese investors have moved back into Tokyo's paper, forcing 10-year JGB yields down 4bp to 0.90 per cent. In addition, the trend of selling the yen come what may appears to have stalled and may even be going into reverse, a shift that appears to be causing ripples through traders" bullish strategies. "We expect volatility to remain more elevated and sentiment to be shaky," Crédit Agricole said in a note. The yen is up 0.4 per cent versus the dollar on Thursday, changing hands at Y100.71, and fast approaching what could again be the critical Y100 level. The Nikkei 225 is now down 13 per cent from its recent peak, technically in "correction" territory. In recent years, such nervousness across markets would give a lift to the greenback, as traders sought out supposed haven products. But the US currency is pulling back from recent highs - down another 0.3 per cent on a trade-weighted basis - and this has helped gold finally break back above the $1,400 an ounce level, gaining $16 to $1,408 an ounce. Another reason equity investors are a bit squeamish is that they are worried the Fed might start reducing its support while other parts of the global economy, particularly the eurozone, continue to struggle, and growth in China slows. Such fretting has been witnessed in industrial commodities over recent months, with iron ore prices hitting multi-month lows and copper struggling to match the effervescence witnessed in the equity market. The red metal is down 0.1 per cent to $3.29 a pound, and Brent crude is off 41 cents to $102.02 a barrel. The resource-rich Sydney stock market fell 0.9 per cent as miners came under pressure, but yen strength was better news for South Korean exporters, which compete directly with Japanese rivals in many sectors including electronics, chemicals and carmaking. Seoul's Kospi index outperformed the region with a loss of just 0.1 per cent, helped by news the country's industrial output grew 1.7 per cent in April from a year earlier, after a 2.9 per cent fall in March. Hong Kong's Hang Seng index and the mainland's Shanghai Composite both fell 0.3 per cent.