Japan Averages Drop Neary 2% Following Hawkish Comments from BoJ Official

Akira Ito
11 Sep, 2024
Tokyo

Stocks in Tokyo extended losses of the previous session after hawkish comments from the Bank of Japan official lifted the yen. 

The Nikkei 225 stock average dropped 1.6%, and the broader Topix index fell 1.8%.

The Bank of Japan board member Junko Nakagawa said that the central bank is prepared to lift rates if inflation and economic data meet targets set by the policymakers. 

Nakagawa's comments lifted the yen to this year's high of 141.35 against the U.S. dollar. 

Manufacturing sentiment in Japan dropped to a seven-month low amid ongoing demand weakness from China. 

Reuters Tankan sentiment index for manufacturers in Japan fell to +4 in September from +10 in August, on the worries of demand weakness from China, global electric vehicle demand slowdown, and raw material price inflation. 

Investors also reviewed the sharp fall in crude oil prices in international trading amid demand growth outlook in the U.S. and China. 

Texas crude oil dropped to a three-year low of $66.85 a barrel, despite the likely supply disruption in the Gulf of Mexico following the expected landfall of Hurricane Francine later today. 

 

Japan Stock Movers 

The Nikkei 225 stock average declined 1.6% to 35,585.24, and the Topix index dropped 1.8% to 2,529.33. 

Tokyo Gas declined 5.4% to ¥3,346.0, and Osaka Gas fell 4.9% to ¥3,348.0. 

Financial stocks were in focus after the yen jumped to this year's high following hawkish comments from the Bank of Japan official. 

Sumitomo Mitsui Financial decreased 1.7% to ¥8,880.0, Mitsubishi UFJ Financial dropped 1.3% to ¥1,427.50, and Mizuho Financial fell 2.4% to ¥2,765.50. 

Energy explorers and distributors fell following a sharp decline in crude oil prices. 

Idemitsu Kosan declined 3.7% to ¥968.0, Cosmo Energy Holdings fell 5.1% to ¥7,150.0, and Eneos Holdings decreased 3.4% to ¥721.20.