Reuters

Japan’s Nikkei Stock Average Touches 2-Week Low as Yen Gains after Trump Fires Fed’s Cook (UPDATE 1)

Yomiuri Shimbun file photo
The Tokyo Stock Exchange

Reuters

12:15 JST, August 26, 2025 (updated at 16:30JST)

TOKYO, Aug 26 (Reuters) – Japan’s Nikkei share average ended at a more than two-week low on Tuesday, as the yen strengthened after U.S. President Donald Trump fired a Federal Reserve governor.

The Nikkei .N225 snapped a two-session winning run, falling 0.97% to 42,394.4, its lowest close since August 8.

The broader Topix .TOPX slipped 1.08% to 3,071.99.

“The market was surprised with the news about Cook and reacted accordingly,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

“Also, investors calmed down from the previous session, in which optimism about the Federal Reserve’s policy loosening boosted equities. We will have to wait for more data until the Fed’s policy decision.”

Wall Street stocks ended lower overnight as investors parsed the U.S. interest rates outlook and looked ahead to AI chipmaker Nvidia’s NVDA.O quarterly earnings this week. .N

The yen JPY=EBS rose to as high as 146.99 to the dollar earlier in the session after Trump took the unprecedented action of removing Federal Reserve Governor Lisa Cook from her position on the Fed’s board of directors.

A stronger yen typically weighs on exporters’ shares by reducing the value of overseas earnings when converted back into Japanese currency.

Toyota Motor 7203.T and Honda Motor 7267.T slipped 1.41% and 1.71%, respectively.

Uniqlo brand owner Fast Retailing 9983.T lost 1.44% and technology investor SoftBank Group 9984.T fell 0.91%.

Chip-related heavyweights Advantest 6857.T and Tokyo Electron 8035.T gave up early losses to end 0.23% and 0.1% higher, respectively.

Investors, who were late on catching up with the Nikkei’s latest rally, seemed to have been buying stocks on dips, which is limiting the declines, Yasuda said.

All but one of the Tokyo Stock Exchange’s 33 industry sub-indexes fell, with the drugmakers .IPHAM.T losing 2.42% to become the worst performer.