Market Updates
Nikkei 225 Stock Average Plunged 2% After the Yen Rebounded
Akira Ito
12 Jul, 2024
Tokyo
Benchmark indexes in Tokyo traded down and trimmed weekly gains after the yen advanced more than 2% on the suspected market intervention.
The Nikkei 225 declined more than 2%, and the Topix index decreased more than 1.5%.
The yen strengthened to 159.05 against the U.S. dollar after U.S. consumer price inflation eased in June, raising the prospect of a rate cut as early as September.
The probable U.S. rate cut is likely to shrink the rate differential between the yields on U.S. and Japanese bonds, supporting the advance in the yen.
Market participants also did not rule out a possible government intervention and support for the yen after the currency drifted to new lows over the last two weeks of trading.
Nearly half the market capitalization of the Japanese stock market is driven by export-driven companies, and a stronger yen cuts into the profit outlook.
Japan Stock Movers
The Nikkei 225 stock average decreased 2.3% to 41,244.36, and the Topix index fell 1.6% to 2,895.55.
SoftBank, Advantest, Tokyo Electron, Disco Corp., and Screen Holdings fell between 4% and 7%.
Financial services stocks were among the leading decliners.
Mitsubishi UFJ, Mizhuo Financial Services, and Sumitomo Mitsui declined by around 2%.
Retailers fell sharply after the yen rebounded.
Seven & I, Isetan Mitsukoshi, and Takashimaya declined between 3% and 4%.
Honda Motor, Toyota Motor, and Nissan Motor declined by around 0.3%.
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