Japanese stocks weakened sharply today, with their main index, the Nikkei 225, posting its sharpest one-day percentage decline in three years. The index fell 3.28 per cent to 37,869.51 points. It closed trading at its lowest level in three months, Reuters wrote.
Stock Market Decline
Technology companies were a big contributor to the Tokyo bourse’s decline, following Wednesday’s developments in the U.S. stock market. In addition, shares of Japanese exporters came under pressure due to a stronger Japanese currency, Kyodo pointed out.
The stronger exchange rate of the domestic currency reduces the value of companies’ overseas earnings after translation. “The stock market has become cautious due to the yen’s rise against the dollar and other leading currencies. It has hurt investor sentiment,” said analyst Jugo Cuboi of Daiwa Securities. He also pointed to the decline in US stock markets.
The yen’s rise
The Japanese yen climbed to its highest level in two and a half months against the dollar, benefiting from the prospect of further monetary tightening in Japan. Investors are now awaiting next week’s Bank of Japan meeting on Wednesday.
Shares in Japanese technology conglomerate SoftBank Group weakened 9.4 percent today, and chipmaker Renesas Electronics’ stock fell as much as 13.6 percent on unfavourable half-year results.
Source: Czech Press Office
