Japan Stocks Rebound, Yen Drifts to a New 34-year Low

Akira Ito
12 Apr, 2024
Tokyo

Stock market indexes rebounded and extended weekly gains, and the yen drifted to a new 34-year low against the U.S. dollar. 

Stock market sentiment was negatively impacted by the persistent decline in the yen, as the Japanese currency drifted to 153.256 in Tokyo trading without prompting government intervention. 

The yield on the Japanese government bond rose to 0.8%, reflecting market nervousness and a widening gap with the U.S. and Japan bond yields. 

Last month, the Bank of Japan ended its negative rate regime and revised interest rates for the first time since 2007, but that move failed to prop up the yen.

Investors are anticipating a currency market intervention coordinated by the ministry of finance and the Bank of Japan, but any relief to the yen is expected to be short-lived. 

Many currency traders in Tokyo are anticipating the yen to extend its 2024 loss of 8.5%, and the embattled currency may drift below 157 against the U.S. dollar. 

Moreover, the Chinese yuan has also been approaching its record low of 7.366 against the U.S. dollar, which could further put pressure on the yen. 

The Nikkei 225 Stock Average gained 0.3% to 39,572.26, and the Topix index rose 0.4% to 2,759.11.

For the week, the Nikkei added 0.4% and the Topix advanced 1.3%. 

In stock trading, tech stocks rebounded, and financial services stocks traded mixed. 

Tokyo Electron, Advantest, Sakura Internet, SoftBank, and Lasertec gained between 1.4% and 2.5%. 

Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial fell between 0.8% and 1.4%. 

Vehicle makers Toyota Motor, Honda Motor, and Subaru gained around 0.5%, but Nissan Motor declined 1.1%.