Japan Nikkei extends losses on Fed concerns

The Japanese stock market ended lower for the fourth consecutive session on Tuesday, August 23, 2022, as risk aversion selling continued after Wall Street’s negative advance overnight amid concerns over futures rate hikes by the US Federal Reserve to fight inflation. At the same time, the slowdown in industrial activity growth in Japan in August also weighed on investors’ risk sentiment.

At the closing bell, the 225-issue Nikkei Stock Average was down 341.75 points, or 1.19%, at 28,452.75. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 21.15 points, or 1.06%, to 1,971.44.

Uncertainty about the pace of U.S. interest rate hikes prevailed among investors as global markets braced for remarks from Federal Reserve Chairman Jerome Powell at Friday’s Jackson Hole symposium.

High-cap tech issues trailed their US counterparts lower and weighed on the broader market, with SoftBank Group falling 2.4%, while Tokyo Electron lost 0.8%.

Hino Motors Ltd., a subsidiary of Toyota, came under heavy pressure after more details of its engine data tampering scandal emerged as its stock fell 6.4%.

Airlines and leisure-related retailers advanced after reports of a possible relaxation of pandemic-related border rules.

ANA Holdings and Japan Airlines climbed 3.3% and 4.9% respectively, while Isetan Mitsukoshi Holdings jumped 4.5%.

ECONOMIC NEWS: The Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) fell to 51.0 seasonally adjusted in August from 52.1 in July, marking the slowest expansion since January of the year last. The 50 mark separates contraction from expansion. The flash services PMI at Jibun Bank slipped to 49.2 seasonally adjusted in August from July’s close of 50.3. Jibun Bank’s Flash Japan Composite PMI, which is calculated using both manufacturing and services, fell sharply to 48.9 from July’s final 50.2.

CURRENCY NEWS: The dollar rose to levels above 137 yen in Tokyo on Tuesday, supported by expectations of a wider interest rate differential between Japan and the United States. As of 5 p.m., the dollar stood at 137.27-28 yen, compared to 136.84-84 yen at the same time on Monday. The euro was at 136.35-36 yen, down from 136.90-90 yen.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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