Japanese Stock Market Indexes Plunge 3%, Yen Rebounds to a 3-month High

Akira Ito
25 Jul, 2024
Tokyo

Market indexes in Japan extended this week's losses after a steep decline in technology stocks following the sharp sell-off in overnight trading in New York. 

The Nikkei 225 and the Topix index dropped more than 3% after tech stocks fell more than 5%. 

Global tech stock rout engulfed markets in Asia and Japan after Tesla and Google-parent Alphabet reported weaker-than-expected quarterly results. 

Tesla said automotive unit revenue declined for the second quarter in a row, and higher discounts and financial incentives in the U.S. and China crimped operating margins. 

Investors sold mega-cap stocks on the worry that the artificial intelligence-related tech stock rally may come to an end sooner-than-expected if large tech companies slowdown spending amid earnings shortfalls. 

Stocks in Tokyo were under pressure after the yen continued to rally for the second consecutive week ahead of the Bank of Japan's policy meeting next week.

The yen rose to 152.06 against the U.S. dollar in the hopes that the central bank is finally ready to increase the interest rate next week and narrow the wide yield gap between the U.S. and Japan bonds. 

 

Japan Stock Movers 

The Nikkei 225 stock average closed down 3.3% to 37,869.51, and the Topix index dropped 3% to 37,869.51. 

Tokyo Electron decreased 4.2% to ¥29,010.0, Advantest rose 6% to ¥5,708.0, Screen Holdings fell 2.6% to ¥13,000.0. 

Softbank fell 9.4% to ¥9,365.0, Renesas Electronics plunged 13.6% to ¥2,583.50, and Hitachi dropped 9.5% to ¥3,078.0. 

Kawasaki Heavy Industries declined 9.1% to ¥5,358.0, Mitsubishi Heavy Industries decreased 6.2% to ¥1,735.50, and Japan Steel Works dropped 5.2% to ¥4,156.0. 

Financial stocks were among the leading decliners amid growing expectations that the Bank of Japan is likely to raise interest at the end of the next policy meeting on July 31. 

Mitsubishi UFJ Financial Group dropped 3.9% to ¥1,675.0, Sumitomo Mitsui Financial decreased 4.3% to ¥10,440.0, and Mizuho Financial Group fell 4.6% to ¥3,249.0.