Japan's Nikkei falls as yen intervention fears keep investors cautious

TOKYO: Japan’s Nikkei share average slipped on Tuesday as investors remained wary of further yen-buying intervention and awaited Toyota Motor’s quarterly results later in the day.

The Nikkei fell 0.11% to 63,684.85 by the midday recess, while the broader Topix slid 0.26% to 3,949.90.

The Nikkei dropped nearly 1% on Monday after Japan’s Finance Ministry said Tokyo and Washington had conducted coordinated yen-buying intervention and would not hesitate to take further action. “After the currency intervention, dollar/yen moved sharply in the yen’s favour from around 163.

Authorities have also indicated they could intervene again if the yen weakens further, so caution remains,“ said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

The dollar traded at 157.5 yen, up 0.22%.

A stronger yen reduces the value of overseas revenue for Japan’s many heavyweight exporters.

Japan’s AI-linked heavyweights were mixed, with technology investment conglomerate SoftBank Group losing 4.5%, while cables and optical fibre manufacturer Fujikura surged 5%.

Toyota Motor, the world’s biggest automaker, is expected to post a fifth straight quarterly decline in operating profit, hit by weaker vehicle sales and rising costs.

Investors may also scrutinise Toyota’s assumed exchange rates and related guidance, given the sensitivity of its earnings to currency swings, said Hiroshi Namioka, chief strategist at T&D Asset Management.

Overall, market breadth was negative, with 141 decliners in the Nikkei against 83 gainers and one unchanged.

The largest losers by percentage in the index were meat processor NH Foods, down 8.69%, followed by parcel delivery and logistics company Yamato Holdings, which shed 5.63%, after their earnings disappointed investors.

The largest percentage gainers in the index were cables and components manufacturer Furukawa Electric, up 9.97%, followed by pharmaceutical company Otsuka Holdings, gaining 7.09%.