The Bank of Japan Struggles to Arrest the Yen's Decline, Nikkei 225 Heads Higher

Akira Ito
24 Jun, 2024
Tokyo

Stock market indexes rebounded in Monday's trading in Tokyo in the hopes that the weaker yen would boost the earnings of industrial and automotive companies. 

The Nikkei 225 and the Topix index gained more than 0.7% after the yen drifted to a 34-year low.

The yen traded at 159.71 against the U.S. dollar amid the persistently wide yield gap between U.S. and Japanese government bonds.

Currency traders are bracing for another bout of weakness in the yen as the Bank of Japan and the Ministry of Finance struggle to arrest the rapid decline. 

Moreover, foreign investors have become net sellers of Japanese stocks, and the benchmark Nikkei has declined about 5% from its peak on March 22, after the slow progress in the widely publicized corporate governance reform and the unwinding of interlocking stock holdings. 

On the economic front, this week investors are looking forward to the release of industrial production, retail sales, and the jobless rate for May and the metropolitan Tokyo area's June inflation data. 

 

Japan Stock Movers 

Market sentiment was strong in Monday's trading, and banks, technology, and industrial companies were among the leading gainers. 

The Nikkei 225 stock average jumped 0.7% to 38,875.87, and the Topix index gained 0.8% to 2,747.11. 

Tokyo Electron, Advantest, Screen Holdings, and SoftBank gained between 0.5% and 2%. 

Mitsubishi UFJ and Mizuho Financial Group advanced 2.2% and 0.9%, respectively, but Sumitomo Mitsui Financial decreased 0.6%. 

Toyota Motor, Honda Motor, and Nissan Motor declined around 0.5% despite the weaker yen. 

Leading exporters, Mitsubishi Electric, Canon, Nidec, TDK, Fujitsu, and Sony, advanced between 1% and 3%.