Japan’s Nikkei flat as currency intervention caution offsets tech gains

TOKYO: Japan’s Nikkei share average was flat on Tuesday, as caution over potential currency intervention outweighed gains in heavyweight technology stocks.

The Nikkei held its ground at 52,882.37, as of 0147 GMT, while the broader Topix edged 0.1% lower to 3,548.89.

The yen spiked on Friday and climbed to a more than two-month high overnight, as speculation grew over coordinated currency intervention by US authorities following remarks from Japan’s prime minister and a leading currency diplomat.

“Stock investors are still trying to find out where the yen stands,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

“They are still cautious about the currency intervention. And there have been many short positions on the yen, which might be unwound.”

 Money market data from Bank of Japan on Monday indicated that the spike in the yen against the dollar was not likely the product of official Japanese intervention.

The yen was last trading at 154.3 per dollar, well above Friday’s low of 159.23.

Chip-related shares rose, with Advantest and Tokyo Electron rising 1.89% and 0.5%, respectively.

Technology investor SoftBank Group gained 0.32%. Shares of Sony Group fell 1.52%, weighing most heavily on the Topix, while Toyota Motor slipped 0.6%.

“The current level of the yen is negative for exporters, but positive for the election campaign,” Ueno said.

Japanese political parties kicked off an election campaign on Tuesday after Prime Minister Sanae Takaichi called for a national election on February 8.

A stronger yen is positive for Takaichi, who backs the loose monetary policy, said Ueno.

The weaker yen tends to raise import costs, driving inflation and putting pressure on the BOJ to tighten the monetary policy.

Frozen food maker Nissui Corp rose 4% to become the top gainer in the Nikkei.