Japan’s Nikkei Falls on Discounting for Dividend, Currency Intervention Caution (Update 1)

Reuters

12:14 JST, March 28, 2024 (updated at 16:40 JST)

TOKYO (Reuters) – Japan’s Nikkei share average fell on Thursday as numerous stocks were discounted for dividend rights before the fiscal year end, while caution over a potential currency intervention to shore up the yen also weighed on sentiment.

The Nikkei ended down 1.46% at 40,168.07, with 202 of its 225 components falling versus just 23 that rose. The index is, however, still set for a 20% jump in the January-March quarter.

The broader Topix slid 1.73% to 2,750.81.

“The market is cautious about a possible currency intervention. It is not clear at which level and when the Japanese government will step in,” said Shuji Hosoi, a senior strategist at Daiwa Securities.

“Foreign investors are eager to buy Japanese stocks but they want to buy them cheap. So they are monitoring how far the yen is allowed to fall.”

The yen fell to a 34-year low against the dollar on Wednesday, prompting Japan’s three main monetary authorities to hold an emergency meeting to discuss the weak yen.

In a briefing afterwards, top currency diplomat Masato Kanda said he “won’t rule out any steps to respond to disorderly FX moves.”

The yen was last traded at 151.375 against the dollar.

On Thursday, the Nikkei was also dragged lower by a number of stocks going ex-dividend, losing about 260 points because of that, strategists said.

Chip-sector shares had outsized losses. Silicon producer Shi-Etsu Chemical was the Nikkei’s biggest drag with a 3.12% slump.

Chip-testing equipment maker Advantest fell 1.62% to be no. 2, while chip-making equipment maker Tokyo Electron rounded out the bottom three with a 0.63% slide.

Uniqlo-brand owner Fast Retailing slipped 0.47%.

All but one of the 33 industry sub-indexes on the Tokyo Stock Exchange fell, with paper makers plunging 6.07% to become the worst performer.

Mining rose 0.87%.