Weakened yen spurs exporter rally, Tokyo stocks edge downward

The Tokyo stock market concluded Tuesday’s trading session with a slight downturn, marked by a surge in buying activity among exporters. This surge, fueled by a weakened yen, managed to offset most of the losses experienced earlier in the day, particularly in the chipmaker sector. The Nikkei Stock Average, comprising 225 key issues, saw a modest decline of 22.98 points, or 0.06 percent, settling at 38,797.51 compared to the previous day.

Weakened yen spurs exporter rally, Tokyo stocks edge downward

Similarly, the broader Topix index ended 9.59 points, or 0.36 percent, lower at 2,657.24. Among the top-tier Prime Market listings, notable declines were observed in sectors such as banking, insurance, and wholesale products. The U.S. dollar exhibited strength against the yen, reaching the mid-147 yen range in Tokyo. This surge followed remarks made by Bank of Japan Governor Kazuo Ueda during a session with upper house lawmakers.

Ueda’s statements tempered expectations that the central bank would discontinue its negative interest rate policy at its March meeting. Early trading hours witnessed significant sell-offs, particularly in heavyweight technology and chip-related firms, mirroring a similar trend in the United States overnight. However, the downturn was notably curtailed in the afternoon, largely due to Ueda’s comments, which prompted a rise in the dollar against the yen.

Consequently, exporters such as Sony Group and Nissan Motor saw a resurgence, edging back into positive territory. Seiichi Suzuki, chief equity market analyst at the Tokai Tokyo Research Institute, noted, “The market settled down partly due to the moves on the currency market.” Moreover, the positive performance in the technology-heavy U.S. Nasdaq’s futures market served to cushion the initial blow suffered by Japanese high-tech shares.

Despite these developments, investor caution persisted, hindering further gains in Japanese indexes. Analysts pointed to the impending release of the February U.S. consumer price index data later in the day. This data is eagerly awaited as it is expected to provide insights into the Federal Reserve’s timeline for potential adjustments to borrowing costs in the world’s largest economy.