Nikkei Index Hits 6-Month Low Due to Tech Stock Declines and Yen Appreciation
The Japanese Nikkei index saw a sharp drop of 2.17% at the close of Friday’s trading, finishing at 36,887.17 points, its lowest level since September 18th. The index also reached 36,813.62 points during the session, marking its lowest intraday level. This decline followed a series of downturns in Wall Street markets, combined with the appreciation of the yen, which negatively impacted Japanese tech companies and exports in general.
Since the beginning of 2023, the Nikkei has incurred a 7.5% loss, making it the second-worst performing index in Asian markets. The index also registered weekly losses of 0.7%. Similarly, the broader Topix index dropped 1.56%, closing at 2,708.59 points.
On an individual stock level, Fast Retailing, the owner of the Uniqlo chain, had the most significant impact on the Nikkei’s drop, falling by 3.64%. Tokyo Electron also saw a 3% decrease, while Advantest fell by 2.34%.
In parallel, Japanese automaker stocks declined due to the yen’s rise against the U.S. dollar, with investors flocking to the Japanese currency as a safe haven. Toyota Motor shares dropped by 0.69%, while Honda Motor saw a decline of 0.56%.
It’s worth noting that the appreciation of the yen typically negatively affects Japan’s exporting companies, as it reduces the value of their foreign earnings when converted back into yen, which impacts their financial performance.
Sources:
- Asian Market Reports
- Reuters Data
- Global Stock Market Analysis