Nikkei falls amid strong pressure on yen and exporters


(MENAFN) On Monday, Japan's NIKKEI index experienced a decline, ending a two-day streak of gains, as the strength of the yen exerted pressure on exporter stocks, including those in the semiconductor and automotive sectors. The Nikkei dropped by 0.66 percent to close at 38,110.22, though it recovered from an intraday fall of up to 1.4 percent. Market analysts attributed this decline to the yen's appreciation and investor caution, particularly with Nvidia's upcoming earnings report anticipated to influence market sentiment.

Shotaro Yasuda, a market analyst at Tokai Tokyo Intelligence, noted that the strong yen and uncertainty surrounding Nvidia's performance contributed to investor hesitancy. Nvidia has been a significant boost to stock markets throughout 2024, and its earnings report later in the week could be a pivotal factor for market sentiment during this traditionally volatile period. The yen's rise to a three-week high against the dollar highlighted the policy divergence between the Federal Reserve, which is expected to cut rates, and the Bank of Japan, which is leaning towards monetary tightening.

The yen's strength impacted exporter stocks negatively, with chip-related companies and automakers seeing declines. Despite a 2.79 percent rise in the U.S. semiconductor index on Friday, Japanese chipmakers like Tokyo Electron and Advantest fell by 2.51 percent and 2.43 percent, respectively. The automotive sector was particularly hard hit, falling 2.87 percent and making it the worst performer among the 33 sector sub-indexes on the Tokyo Stock Exchange. The broader Topix index also fell, down 0.87 percent to 2,661.41, largely due to a 3.15 percent decline in Toyota Motor Corp shares.

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