Japan Indexes Weighed Down by Rate Path Worries, Core Machinery Orders Fell In September

Akira Ito
18 Nov, 2024
Tokyo

Stock market indexes in Tokyo declined following losses in Friday's trading in New York. 

The Nikkei average and the Topix index fell more than 0.7% amid worry about the interest rate path in the near future. 

Last week, U.S. Fed Chair Jerome Powell said there is no urgency in lowering rates in the imminent future, citing strong economic growth. 

Powell's comments raised the prospects of fewer and smaller rate cuts over the next three months, weighing on the market sentiment. 

The yen dropped to 154.55 against the U.S. dollar on the worry that the Bank of Japan may continue its gradual approach in raising interest rates. 

Currency traders are bracing for the yen to sink to as low as 165 against the U.S. dollar if rising trade tensions between China and the U.S. lead to competitive currency devaluation in the region. 

Investors also reacted negatively to a surprise decline in Japan's machinery orders in September. 

Core machinery orders, which exclude large and volatile orders for ships and power equipment, declined 4.8% from a year ago in September. 

Core machinery orders decline accelerated from a fall of 3.4% in August, according to an update released by the Cabinet Office. 

On a monthly basis, core orders declined for the third month in a row and fell 0.7% to 852 billion yen in September. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average declined 1% to 38,238.42 and decreased 0.7% to 2,693.09. 

Semiconductor-linked equipment makers led the decliners in Tokyo trading. 

Tokyo Electron declined 1.8% to ¥21,945.0, Screen Holdings fell 1.9% to ¥9,342.0, Lasertec dropped 2.9% to ¥17,700.0, and Advantest decreased 0.4% to ¥9,100.0. 

Sumitomo Mitsui Financial declined 2% to ¥3,558.0, Mitsubishi UFJ Financial decreased 0.7% to ¥1,810.50, and Mizuho Financial fell 0.6% to ¥3,742.0. 

Dentsu Group dropped 10.5% to ¥3,687.0 after the advertising company reported mixed quarterly results. 

The company reported a modest 0.3% increase in revenue in the third quarter but also revised its annual outlook to flat from the previous estimate of a 1% increase. 

Chugai Pharmaceutical plunged 10.1% to ¥6,427.0, and Otsuka Holdings decreased 4% to ¥8,758.0. 

Ryohin Keikaku gained 5.5% to ¥2,938.0, M3 added 5.6% to ¥1,320.0, Taise advanced 2.5% to ¥6,746.0, and Mercari increased 3.2% to ¥1,987.0.