Business / Financial Markets | TSE DATA & REPORT

Nikkei plunges on yen's rise to end below 21,000

JIJI

Stocks plunged on the Tokyo Stock Exchange on Tuesday amid the yen’s appreciation against the dollar, sending the key Nikkei average below the 21,000 threshold.

The 225-issue Nikkei average fell 151.29 points, or 0.72 percent, to end at 20,972.71, after gaining 7.11 points on Monday. The market yardstick last closed below 21,000 on June 7.

The Topix index of all first-section issues finished down 11.07 points, or 0.72 percent, at 1,528.67. It fell 6.97 points the previous day.

The market showed resilience after getting off to a weak start, supported by a rise in Shanghai stocks and bargain hunting.

But stocks went south later in the morning as selling pressure built up as the dollar weakened vis-a-vis the yen, brokers said.

Also weighed on by selling stemming from a drop in the Nikkei futures price, both indexes expanded losses toward Tuesday’s closing.

The dollar dropped against the yen after the Australian dollar tumbled versus the Japanese currency on selling triggered by the just-released minutes of the Australian central bank’s policy-setting meeting earlier this month suggesting the possibility of a fresh interest rate cut, traders said.

Some brokers also offered the view that the dollar’s weakness was brought about by U.S. President Donald Trump’s tweet on Monday declaring the start next week of the process of “removing the millions of illegal aliens who have illicitly found their way into the United States.”

Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said investors put active buying on hold in the afternoon “to wait for the outcome” of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting through Wednesday.

Falling issues outnumbered rising ones 1,781 to 307 in the TSE’s first section, while 55 issues were unchanged.

Volume increased to 1.023 billion shares from Monday’s 934 million shares.

Tateru dived 18.61 percent after news reports said the land ministry plans to slap a business suspension order on the apartment management firm due to its data manipulation.

Clothing store operator Nishimatsuya Chain fell 6.73 percent following the company’s announcement of a sharp profit drop in March-May.

Other major losers included electronic parts producer Taiyo Yuden and cybermall operator Rakuten.

On the other hand, drug store chain Tsuruha Holdings shot up 3.97 percent after the company reported brisk earnings for the business year that ended in May.

Among other winners were electronics maker Fujitsu and machinery producer Toshiba Tec.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average fell 160 points to end at 20,910.

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