Japan’s Nikkei Stock Average Touches 4-Month Low on US Economic Outlook Woes, Stronger Yen (UPDATE 1)

Reuters

12:53 JST, February 26, 2025 (updated at 17:00 JST)

TOKYO, Feb 26 (Reuters) – Japan’s Nikkei share average fell to a four-month low on Wednesday amid worries about the U.S. economic outlook and a stronger yen, but trimmed its losses by the close as investors sought to buy back cheap stocks.

The Nikkei fell 0.25% to close at 38,142.37, after falling to as low as 37,742.76, its lowest level since October 25, earlier.

The broader Topix dropped 0.3% to 2,716.4.

“Rising uncertainties hurt investor sentiment. The market was concerned about the U.S. economy’s outlook, the impact of U.S. tariff plans and the direction of the yen,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

Data on Tuesday showed U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February – the latest in a string of surveys suggesting that businesses and consumers were becoming increasingly rattled by the Trump administration’s policies.

The yen rose to its highest level since October after the U.S. weak economic data.

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

Chip-making equipment maker Tokyo Electron slipped 5.19% to drag the Nikkei the most. Technology investor SoftBank Group lost 2.81%. Chip-testing equipment maker Advantest reversed early losses to end 0.78% higher.

Investors were cautious as they awaited Nvidia’s quarterly earnings report later in the day, said Arisawa.

Mitsubishi Corp lost 2.61% after surging 8.8% in the previous session on comments from billionaire investor Warren Buffett about the ownership of Japanese trading firms by his Berkshire Hathaway.

Mitsui & Co lost 1.44%.

Banks fell 1.67% as yields on Japanese government bonds slipped.

Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group fell 2.07% and 1.11%, respectively.

Power transmission cable maker Furukawa Electric jumped 4.36% to become the biggest gainer on the Nikkei.