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Japan’s Nikkei Stock Average ended lower on Friday, September 13, 2024, as the yen surged, impacting export-driven sectors. The broader Topix index followed suit, slipping 0.82% to 2,571.14.
The strengthening yen, which climbed to 140.645 against the U.S. dollar—the highest since December 2023—created concerns about corporate earnings for Japanese exporters. This currency shift has a direct impact on companies that rely heavily on overseas sales, as their products become more expensive in foreign markets when the yen appreciates. The auto sector was notably hit, with Toyota Motor Co. dropping 2.31% and Honda Motor Co. losing 1.44%.
“The stock market has been closely linked to currency movements, with investor concerns centred around the impact of a stronger yen on corporate profits,” said Kentaro Hayashi, a senior strategist at Daiwa Securities. However, Hayashi pointed out that some domestic companies may still perform well even if the yen strengthens further to around 130 per dollar, signalling that the market could be overreacting.
Despite the overall downturn, chip-related stocks provided a cushion for the Nikkei. Tokyo Electron, a major player in the semiconductor equipment sector, rose by 1.72%, while Advantest, a company specialising in testing equipment for semiconductors, gained 1.3%. The global demand for chips has remained robust, helping these companies outperform others on the Tokyo Stock Exchange.
In total, 75% of the stocks listed on the exchange’s prime market fell, while only 21% posted gains, and 3% remained flat. Other sectors that suffered included rubber makers, which fell by 1.54%, and entertainment giant Konami Group, which dropped by 3.8%. Retail heavyweight Fast Retailing, the parent company of Uniqlo, also struggled, declining by 1.39%.