Yen Swings, Nikkei Corrects as Markets Wary of Energy
Japanese stocks closed lower on Monday after Japan's chief currency official, Atsushi Mimura, emphasized that authorities are ready to act to address exchange rate volatility. The statement came as the yen approached 160 per US dollar, amidst global markets still fragile due to fluctuating energy prices and Middle East tensions.
The Nikkei 225 index fell 3.48%, or 1,857.04 points, to 51,515.49. Mimura highlighted that speculative activity in oil futures contracts has the potential to "contagious" to the foreign exchange market, thus amplifying yen movements. He emphasized that the government is ready to act "at any time" to address volatility, considering the impact of exchange rate changes on the economy.
The comments underscore the policy challenges faced as geopolitical tensions drive sharp oil prices and disrupt risk sentiment. For the Japanese market, yen volatility and energy costs are two key channels affecting stock valuations, particularly in sectors sensitive to energy imports, margins, and export exposure.
On the issuer side, Chugai Pharmaceutical fell 8% after partner Roche halted development of emugrobart for neuromuscular disorders due to perceived weak efficacy despite a solid safety profile. This news weighed on sentiment in the healthcare sector, adding to the burden on the index.
Synspective fell 5% despite the company launching its eighth StriX SAR satellite to expand its Earth observation network, suggesting the market was more focused on risk-off sentiment than positive corporate developments. Kubota also fell 6% after warning of supply risks and exploring alternative shipping routes for plastics amid disruptions related to Hormuz.
Looking ahead, the market will monitor the direction of the yen and policy signals from Japanese authorities, including whether exchange rate volatility triggers an immediate response. Oil movements and the intensity of speculation in the futures market are also key variables, as both can influence imported inflation, global interest rate expectations, and Japanese equity sentiment.
Source: Newsmaker.id
