Rate Jitters Sap Market Sentiment In Japan, Yen Falls Below 155 Mark

Akira Ito
25 Apr, 2024
Tokyo

Benchmark indexes in Tokyo halted a three-day market rally ahead of the Bank of Japan's monetary policy decisions on Friday. 

The Nikkei 225 Stock Average declined 1.9% to 37,734.39, and the Topix index dropped 1.4% to 2,673.27. 

Amid a broad selloff, technology and exporters led the decliners as rate jitters turned volatile in the session. 

The Japanese yen traded at 155.61 against the U.S. dollar and fell below the 155 mark for the first time in 34 years, and the Bank of Japan was widely expected to hold rates steady at the end of a two-day meeting on Friday. 

Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho fell around 1%, and banks and financial services were among the leading decliners ahead of the BOJ's rate decision. 

Tech stocks were under pressure after Facebook-parent Meta Platforms issued a weaker-than-expected revenue outlook. 

Tokyo Electron, SoftBank, Screen Holdings, Lastertec, Advantest, and Socionext fell between 1.5% and 4%. 

Retailers were also under pressure; Isetan Mitsukoshi declined 5%, J Front Retailing fell 2.5%, and Fast Retailing dropped 3.5%. 

Canon Inc. declined 7.7% to ¥4,100.0 after the camera maker reported weaker-than-expected earnings in the March quarter. 

Revenue in the quarter increased by 1.8% to ¥988.5 billion, after the increases in printer, medical, and industrial equipment sales growth were overwhelmed by an 8.8% decline in sales in the camera business. 

Operating profit declined 5.2% to ¥80.2 billion, or $515.5 million, after selling and other expenses rose at a faster pace than revenue. 

Net profit rose 6.3% to ¥59.9 billion and fell short of market expectations despite the weakness in the yen. 

The camera and printer maker reiterated its 2024 net income outlook at ¥305 billion. 

Elsewhere in Asia, markets traded lower tracking losses in overnight trading in New York, and tech stocks dropped after Facebook-parent Meta Platform's guidance fell short of market expectations. 

Market indexes in Shanghai and Hong Kong edged higher amid earnings optimism and sustained buying from foreign investors. 

The KOSPI index in Seoul declined 1%, and South Korea's economy expanded by 3.4% in the March quarter from a year ago, following a 2.2% increase in the fourth quarter. 

The economy expanded at the fastest pace since the fourth quarter of 2021, driven by higher consumption of goods and services and a sustained increase in exports of tech products.