Tokyo, 4 January, /AJMEDIA/
Tokyo stocks slid Wednesday morning, as investors started the first trading day of 2023 with heightened fears that the Bank of Japan could move further toward monetary tightening and cause the yen to rise sharply against the U.S. dollar.
The 225-issue Nikkei Stock Average dropped 369.84 points, or 1.42 percent, from Friday to 25,724.66. The broader Topix index was down 19.28 points, or 1.02 percent, at 1,872.43. Japanese financial markets were closed Monday and Tuesday due to the New Year holidays.
Nearly all 33 industries on the Tokyo Stock Exchange fell, with marine transportation, mining, and precision instrument issues among the worst performers.
The U.S. dollar mostly traded in the upper 130 yen range Wednesday morning in Tokyo, little changed from its level in New York overnight. The dollar briefly fell to the mid-129 yen zone on Tuesday, a level last seen in June, on expectations of a narrowing gap in long-term U.S. and Japanese interest rates.
At noon, the dollar fetched 130.81-82 yen compared with 130.96-131.06 yen in New York at 5 p.m. Tuesday.
The euro was quoted at $1.0563-0567 and 138.17-24 yen against $1.0543-0553 and 138.09-19 yen in New York late Tuesday afternoon.
The risk-off sentiment prevailed as investors became increasingly wary of the BOJ shifting away from its ultraloose monetary policy after it surprised the market in December with its decision to raise its bond-yield ceiling, a move widely seen as a rate hike.
A news report during the year-end holidays that the central bank is considering revising upward its inflation outlook at its policy meeting later this month also added to the fears, prompting investors to brace for further monetary tightening and a firmer yen, analysts said.
“Investors thought that the BOJ would not change its policy further” for a while after the central bank’s policy change in December, said Shingo Ide, chief equity strategist at the NLI Research Institute.
“But overseas investors were skeptical of that view all along. That skepticism has started to prevail among domestic investors, too, given the recent downtrend in stocks,” he said.
Weaker-than-expected Chinese manufacturing-related data released during the Japanese holidays also dampened investors’ sentiment, they said.
Shares sensitive to economic fluctuations were lower due to the worsened sentiment. Marine transporter Nippon Yusen fell 171.5 yen, or 5.5 percent, to 2,938.5 yen. Oil explorer Inpex slid 54 yen, or 3.9 percent, to 1,342 yen.
Some export issues also slipped amid the yen’s strengthening trend. Mitsubishi Motors lost 30 yen, or 5.9 percent, to 480 yen. Mazda Motor sank 39 yen, or 3.9 percent, to 966 yen.
Among Prime Market issues, declining issues outnumbered advancers 1,523 to 269, while 46 ended the morning unchanged.
