Credit: The Economic Times
Japan’s Nikkei index fell to a one-month low, reflecting the volatility in global markets. This decline was influenced by mixed earnings reports from major U.S. tech companies and a significant surge in the yen, which together created an environment of uncertainty for investors.
The performance of U.S. technology companies has a substantial impact on global markets, including Japan’s. Recent earnings reports from major U.S. tech firms presented a mixed picture, with some companies outperforming expectations while others reported weaker-than-expected results. This inconsistency has raised concerns about the overall health of the tech sector, which has been a major driver of global stock market growth.
Japan’s Nikkei share average closed lower for the sixth consecutive session on Wednesday, driven by mixed earnings reports from major U.S. tech firms and a strengthening yen.
The Nikkei fell 1.11% to a one-month closing low of 39,154.85, marking its longest losing streak since October 2021. The broader Topix index also declined, dropping 1.42% to 2,793.12.
Wall Street had a slightly negative close on Tuesday as investors awaited earnings results from Alphabet and Tesla. While Alphabet exceeded second-quarter earnings expectations, Tesla reported its lowest profit margin in over five years, missing estimates.
Meanwhile, the yen rallied to a seven-week high of 154.36 per dollar on Wednesday, with markets pricing in a 56% chance of a rate hike at the Bank of Japan’s upcoming July 30-31 monetary policy meeting. A stronger yen typically hurts exporter shares by reducing the value of overseas profits when converted back to yen.
Despite hitting a record high of 42,426.77 on July 11, the Nikkei has since faced a series of losses as chip shares underperformed and the yen appreciated sharply from the 161 range.
In notable stock movements, Nidec jumped 6.1% after the electric motor maker raised its full-year operating profit forecast on Tuesday. Conversely, Mitsubishi Motors slid 7.4% on disappointing profit reports, making it the worst performer in terms of percentage decline.