Japan’s Nikkei Ends at 3-month Low as Yen Strengthens (Update 1)

Reuters

12:33 JST, July 25, 2024 (updated at 16:00 JST)

TOKYO (Reuters) — Japan’s Nikkei share average ended at a three-month low and posted its biggest daily decline in three years on Thursday as the yen’s gain against major currencies hurt investor sentiment.

The Nikkei fell 3.28% to end at 37,869.51, its lowest close since April 25.

The index extended its losing streak to seven, the longest losing run since October 2021 and posted its biggest daily fall since June 2021.

The broader Topix slipped 2.98% to 2,709.86.

The yen rose to its strongest level against the dollar in 2½ months and scaled multi-month highs against other currencies ahead of next week’s Bank of Japan (BOJ) meeting.

A stronger yen tends to hurt exporter shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.

“The market turned cautious about the yen’s gain against the dollar and other major currencies. That hurt investor sentiment,” said Yugo Tsuboi, chief strategist at Daiwa Securities.

“And worries about the U.S. economic slowdown seemed to have sent Wall Street lower overnight,” Tsuboi added.

Technology investor SoftBank Group tanked 9.39% to drag the Nikkei the most. Chip-related shares tracked their U.S> peers, with Tokyo Electron and Advantest declining 4.82% and 6.04%, respectively.

Renesas Electronics slumped 13.62% after the chip maker reported a 29% decline in net profit for six months to June.

Nissan Motor fell 6.98% as the automaker saw first-quarter profit almost completely wiped out and slashed its annual outlook.

Food-related shares rose, with beer brewer Sapporo Holdings rising 3.23% to become the top performer on the Nikkei.

Frozen-food maker Nichirei rose 3.13%.

All but three of the Tokyo Stock Exchange’s 33 industry sub-indexes fell. The airline sector inched up 0.57% to become the top-performing sector.