Japan's Stocks Decline After Yen Gains and U.S. Yields Hold Drop

  • With global economy fairly flat, yen can’t weaken: Ichiyoshi
  • Fall in oil prices may pressure market longer term: Daiwa SB

The Topix index declined after the yen gained 0.4 percent against the dollar overnight and U.S. long-term yields fell. 

“The global economy isn’t bad but there’s no impression that it’ll get markedly better from here, and I expect it to remain fairly flat,” said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co. in Tokyo. “In that situation, U.S. long-term yields don’t go up and the yen doesn’t weaken.”

Federal Reserve Governor Lael Brainard said soft inflation could cause her to reassess the path forward for monetary policy should it linger. The pound dropped 0.4 percent after a YouGov poll showed U.K. Conservatives may lose 20 seats in the general election. Energy product makers were the biggest decliner among industry groups on the Topix Wednesday as oil held below $50 per barrel.

“In the mid-to-long term, the fall in oil prices could put downward pressure on the overall market,” said Soichiro Monji, general manager of the economic research department at Daiwa SB Investments Ltd.

Summary

  • Topix -0.3% to 1,568.37 at close in Tokyo
  • Nikkei 225 -0.1% at 19,650.57
  • Yen slightly weaker at 110.97 per dollar
  • IHI +2.5%; raised to outperform from neutral at Credit Suisse
  • Kyowa Kirin -3.9%; cut to equalweight from overweight at Morgan Stanley MUFG
  • Mitsui Mining +3.8%, Dowa +3%; upgraded at Daiwa on profit outlooks
  • Ryoyo Electro -5.1%; 1Q operating profit -28% y/y to 325m yen
  • Showa Denko +5.2% after BofAML upgrades to buy from underweight

For more on Japan markets:
Japan’s Industrial Production Hits Highest Level Since 2008
JAPAN REACT: Strong Production Signals Firm Investment Outlook
Time to Revise Japan’s Fiscal Reform Target, Ex-Minister Says
Americans Juiced Returns Buying Japan Stocks in Dollars: Chart
Citi Hires Watanabe From JPMorgan as Japan Regulatory Specialist

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE