Japan's Nikkei drops over 2% as yen jumps after joint intervention

TOKYO: Japan’s Nikkei share average fell on Monday from a one-week high in the previous session, hurt by a rapid appreciation in the yen after Tokyo and Washington confirmed they had carried out a rare joint currency intervention late last week.

The Nikkei sank 2.2% to 62,956.48 by 0058 GMT, while the broader Topix lost 2.8% to 3,893.17. Of the Nikkei’s 225 components, 212 fell and only 13 rose.

The yen gained as much as 1.4% to a four-week high of 155.20 per US dollar, adding to a 3.8% surge over the previous two sessions.

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

“The joint currency intervention is the biggest focus for stocks today,” weighing broadly on the market, said Wataru Akiyama, an equities strategist at Nomura Securities.

Japan and the United States conducted coordinated yen-buying intervention and will not hesitate to take further action, Japan’s finance ministry said.

The yen had been hovering around a 40-year trough against the dollar late last month.

The Nikkei had jumped more than 4% on Friday and touched the highest level since July 24, powered by a rally in tech stocks after Microsoft’s strong forecasts allayed fears about the industry’s massive AI spending.

On Monday, however, many Japanese chip-linked heavyweights declined, with Tokyo Electron down 2.3% and Advantest slipping 1.3%.

AI-focused startup investor SoftBank Group reversed an early loss to rise 1.2%, and Lasertec climbed more than 5%.

Memory chip maker Kioxia soared about 10% after announcing a share buyback plan. All 33 of the Tokyo Stock Exchange’s industry groupings fell, with precision instrument makers down the least with a 1.2% loss.

Transport equipment makers sank the most, losing 5%. Toyota fell 5.3% and Suzuki slid around 8%.