The yen dipped against the dollar, reversing recent gains influenced by suspected Japanese intervention.
The Nikkei stock index Japanese yen depreciation by more than 2 per cent on Thursday. This was mainly due to a decrease in high-tech stocks following a similar trend in the U.S. market. Also, the yen became stronger against the U.S. dollar, affecting companies that rely on exports.
The dollar in Tokyo went down to 155.38, its lowest level since June 7. This drop came after news that former U.S. President Donald Trump, who is running against Joe Biden in the upcoming election, criticized a strong dollar for harming the manufacturing sector. However, the dollar later rose to around 156 yen due to buying from importers and investors reacting to its rapid fall.
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The Nikkei Stock Average, which includes 225 companies, closed 971.34 points lower at 40,126.35, a decrease of 2.36 percent compared to the previous day. The broader Topix index also fell by 46.58 points to 2,868.63, a decline of 1.60 percent. In the main Prime Market, there was a drop in precision instruments, machinery, and electric appliance stocks. The Nikkei index briefly lost almost 1,000 points as investors sold off tech stocks following decreases in the Nasdaq and a U.S. semiconductor index. Investors were cautious following reports that the U.S. might impose strict trade rules on companies like Tokyo Electron Ltd., which provides China with semiconductor technology.
Investors were nervous following a report that Biden might put trade restrictions on companies like Tokyo Electron Ltd. that help China with semiconductor technology. This news led to the selling chip-related stocks, which had been rising due to the artificial intelligence trend. Tokyo Electron and Screen Holdings saw significant drops in their stock prices. Additionally, the dollar’s decrease against the Japanese yen depreciation affected exporters negatively since a strong yen would lower their profits when they bring money back from overseas.
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