Japan Indexes Extend 4-day Losses Ahead of BoJ Policy Decisions

Akira Ito
22 Jul, 2024
Tokyo

Stocks in Tokyo faced selling pressure amid heightened geopolitical uncertainty and caution ahead of the Bank of Japan's monetary policy decisions next week. 

The Nikkei 225 and the Topix indexes declined tracking losses in Friday's trading on Wall Street, following the losses in tech stocks after Microsoft and Crowdstrike product changes knocked down information systems around the world. 

Two benchmark indexes extended losses to the fourth session in a row and dropped to their three-week lows. 

Investors were also on the defensive after U.S. President Joe Biden dropped out of the presidential race and endorsed vice president Kamala Harris. 

Democratic frontrunner Harris is likely to continue defense cooperation with Japan and maintain an active role in keeping international trade and defense alliances intact, unlike Republican Party candidate Donald Trump with a checkered past and weak grasp on international affairs. 

The yen edged slightly higher to 156.85 against the U.S. dollar in the hopes that the Bank of Japan may revise rates higher at the end of its policy meeting next week and shrink the wide yield gap between the U.S. and Japan. 

 

Japan Stock Movers 

The Nikkei 225 stock average declined 1.3% to 39,558.24 and the Topix index dropped 1.2% to 2,827.88. 

Tech stocks were among the leading decliners in Tokyo in Monday's trading. 

Tokyo Electron, Avantest, Screen Holdings, and Lastertec declined between 1% and 2%. 

Financial stocks were also under pressure amid interest rate path uncertainty. 

Mitsubishi UFJ Financial, Mizuho Financial, and Sumitomo Mitsui Financial declined between 0.2% and 1%. 

Teijin Ltd. increased 4% to ¥ 1,430.50, and East Japan Railway rose 3.2% to  ¥2,779.50. 

Travel stocks were in focus amid a surge in the arrival of foreign tourists following the sharp decline in the yen this year. 

West Japan Railway increased 1.8% to ¥2,950.0, Central Japan Railway jumped 0.9% to ¥3,508.0, and Japan Airlines declined 0.1% to ¥2,500.0, and Isetan Mitsukoshi decreased 0.9% to ¥3,264.0.