Nikkei Extends Weekly Losses, Yen Sank to a New 34-year Low

Akira Ito
17 Apr, 2024
Tokyo

Stocks in Tokyo traded down, tracking overnight losses in Europe and the U.S. 

Market indexes traded down amid rising tensions in the Middle East and worries of government intervention in the currency market.

The Japanese yen traded at 154.65 against the U.S. dollar in Tokyo at 1.25 p.m. 

The yield on 10-year Japanese government bonds hovered near 0.88% and on 2-year bonds approached 0.27%, and investors worried that the bond yield may have to rise after the hawkish comments from the Federal Reserve chairman, Jerome Powell. 

Global bond markets have lacked direction after the latest string of U.S. economic data suggested that the Federal Reserve is likely to keep rates higher. 

The higher-for-longer U.S. interest rates are likely to support higher rates around the world, as bond market yields in developed and developing economies reference the U.S. bond markets. 

Japan market indexes traded down after U.S. Federal Reserve Chairman Jerome Powell confirmed at a panel discussion that policymakers need more time before lowering interest rates. 

“Given the strength of the labor market and progress on inflation so far, it is appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us,” Powell added. 

The Nikkei 225 Stock Average declined 0.5% to 38,293.27, and the Topix index decreased 0.7% to 2,677.18. 

Banks were among the leading decliners in Tokyo.

Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial declined between 1% and 2%.

Tech stocks traded mixed, and Softbank fell 1%, but Tokyo Electron, Screen Holdings, Advantest, Sakura Internet, and Lasertec Corp. fell between 1% and 4%. 

Resonac Holdings jumped 13.7% to ¥3,940.0 after the company lifted its profit outlook following a strong demand for chip materials. 

After the close on Tuesday, Resonac said 2024 revenue is expected to increase by 5.5% to 1.36 trillion yen, and net income is expected to swing to 25 billion yen from a loss of 18.99 billion yen in 2023. 

The chemical company had previously projected a 2024 profit of 10 billion yen.