Tokyo Stocks Tumble Further on Stronger Yen

May 24, 2018

Tokyo- Stocks continued to tumble on the Tokyo Stock Exchange Thursday, battered by the yen's further strengthening against the dollar.

The benchmark 225-issue Nikkei average plunged 252.73 points, or 1.11 pct, to close at 22,437.01, the lowest level since May 9. On Wednesday, it plunged 270.60 points.

The TOPIX index of all first-section issues ended down 21.66 points, or 1.21 pct, at 1,775.65, after retreating 12.26 points on the previous day.

The key market gauges stayed deep in negative territory for most of Thursday's trading due chiefly to the yen's rise amid a risk-averse mood attributed to concerns over the postponement or cancellation of the planned first-ever U.S.-North Korea summit currently planned for June 12 in Singapore, market sources said.

The market took a beating also because of falls in automakers following news reports that U.S. President Donald Trump's administration is considering new tariffs on imported vehicles, according to the sources.

The yen's strength "induced futures-led selling by speculators, battering export-oriented issues," said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Co.

Fujii also pointed to "rekindled geopolitical risks" involving North Korea as a factor behind Thursday's tumble.

The market failed to overcome heavy losses in the absence of purchases backed by brisk corporate performances after the peak of the earnings reporting season in Japan, he added.

Financial issues were hit by a wave of selling inspired by falls in long-term U.S. interest rates following the release on Wednesday of minutes of the May 1-2 meeting of the U.S. Federal Reserve's Federal Open Market Committee, an official of a bank-affiliated securities firm said.

A hawkish monetary policy stance of Fed policymakers was not shown in the minutes, the official continued.

Falling issues far outnumbered rising ones 1,568 to 445 in the TSE's first section, while 70 issues were unchanged.

Volume increased to 1,539 million shares from 1,487 million shares on Wednesday.

Automakers Toyota, Honda, Subaru and Nissan suffered substantial losses.

Financial names, such as megabank groups Mitsubishi UFJ, Mizuho and Sumitomo Mitsui, as well as insurers Tokio Marine, Sompo Holdings and Dai-ichi Life, were also downbeat.

Clothing retailer Shimamura sank 5.76 pct after announcing on Wednesday that its sales in May fell 7.7 pct from a year earlier on a same-store basis.

By contrast, Lifull attracted purchases thanks to an upward revision by Mitsubishi UFJ Morgan Stanley Securities on Wednesday in its investment rating and target stock price for the real estate information provider, brokers said.

Also on the plus side were cosmetics maker Shiseido and drug manufacturer Otsuka Holdings.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average plummeted 310 points to 22,410. Jiji Press