Japanese Yen Dropped to 10-month Low, Chinese Listed Companies Profit Dropped 10%

Arjun Pandit
06 Sep, 2023
Mumbai

Market indexes in Asia traded down after higher crude oil prices and the rise in the U.S. Treasury yields added to China property woes in the region. 

Market indexes in Tokyo traded higher for the eighth session in a row amid growing interests from foreign investors. 

The Japanese yen declined to 147 against the U.S. dollar and dropped to a 10-month low as interest rate gap between the Japanese government bonds and the U.S. Treasury widened.  

In overnight trading in New York, Treasury yields spiked up near 16-year high after crude oil price jumped 1%. 

The sharp decline in the yen prompted the call for a possible government intervention if currency speculation persists, Vice Minister of International Affairs Masando Kanda said to reporters.  

Chinese markets traded mixed and foreign investors continued to lighten positions in large banks and property sectors. 

Profits at 5,000 plus listed companies in Shanghai and Shenzhen declined 9.6% in the second quarter ending in June from a year ago, Haitong Securities said in a report. 

Profit rose 1.3% in the previous quarter. 

Chinese real estate developers rebounded after the government-controlled Securities Times published a front-page opinion editorial urging more cities to remove residential property sales hurdles. 

The Chinese economy is struggling on several fronts, including weak property market sentiment, record youth unemployment, slow and uneven economic recovery and falling international exports.  

The Caixin China General Service PMI eased to 51.8 in August from 51.9 in July, S&P Global reported Tuesday.  

The services sector activity growth was the weakest since the beginning of the year, amid persistent downward pressure on the economy.  

New order growth slowed while export sales fell for the first time since December and at the same time sentiment index declined to a 9-month low.

The weakness in the construction sector and falling exports are negatively impacting services related to these industries. Moreover, the expected sharp rebound in travel related services is weaker than expected. 

In Wednesday's trading, the Nikkei index increased 0.6%, the Shanghai SSE Composite index rose 0.2%, the Hang Seng index rose 0.05% and the KOSPI index decreased 0.7%.  

In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.