Japan to face unprecedented food price hikes in October 2024 amid economic challenges
The latest report by Teikoku Databank reveals that 2,911 food items from 195 manufacturers will experience price hikes in October.
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Tokyo market slips amid U.S. rate cut speculation and Yen surge
The Nikkei 225 fell by 1.2%, closing at 32,500, while the broader Topix index dropped 0.9%, following similar trends in international markets
Nikkei Index drops sharply amid yen strength concerns
The yen’s strength intensified as the US Federal Reserve is anticipated to announce a 0.5% rate cut at the ongoing Federal Open Market Committee (FOMC) meeting. This expected reduction would narrow the interest rate differential between Japan and the US, pushing the yen to a high of 139 per dollar—its strongest level in over a year. Although the yen has recently settled in the high 140s per dollar, the threat of further appreciation remains, prompting heavy selling of export-driven stocks like Toyota. The impact of a stronger yen is feared to erode profitability for exporters, exacerbating market volatility.
Yen hits 1-year high against dollar amid fed rate cut speculation
The yen’s appreciation reflects market expectations that the Fed will reduce rates, potentially narrowing the interest rate differential between Japan and the US. This sentiment is driven by speculation that the Fed might implement a larger-than-expected rate cut. Analysts anticipate that the Fed will ease rates for the first time in over four years, with the prevailing prediction being a standard 0.25% reduction. However, a recent report by the Wall Street Journal on September 12 heightened expectations for a more substantial 0.5% cut, double the usual amount.
Nikkei slips as Yen strengthens, export stocks struggle
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.
Yen strengthens 1% against dollar amid shifts in interest rate expectations
Market sentiment has been shifting as traders anticipate the outcome of the upcoming Federal Open Market Committee (FOMC) meeting, scheduled for September 17th and 18th. There is considerable debate over whether the Federal Reserve will implement a 25 basis point (bp) or a more substantial 50 bp rate cut. Currently, the market is pricing in a rate cut of approximately 34 bp, up from 26 bp on September 11th, reflecting heightened expectations of a more aggressive reduction.
Yen strength stabilizes as markets anticipate policy decisions
During the second week, the yen appreciated amid expectations of a domestic interest rate hike, which led to a decline in Japanese stocks. The Tokyo Stock Price Index (TOPIX) fell by 1% over the week. Market participants are expected to remain cautious in the first half of the third week as they monitor currency fluctuations.
Yen weakens as U.S. rate cut expectations fade
The yen briefly weakened to approximately 143.03 yen per dollar around 4:30 p.m. on the same day. This depreciation occurred against the backdrop of a rebound in the Tokyo stock market, with the Nikkei average rising over 1,200 yen. This uptick in stock prices was fueled by gains in U.S. tech stocks, fostering a risk-on sentiment among investors, which further pressured the yen.
Japanese stocks continue downward slide amid strong yen and BOJ policy uncertainty
On Tuesday, the Nikkei 225 ended the day down by 1.2%, extending its losing streak as investors grappled with the implications of recent comments made by a BOJ official.
Nikkei slides for seventh day amid yen strength and U.S. debate impact
The yen's temporary rise to the 140 yen range against the dollar exacerbated the sell-off, particularly impacting export stocks. The market was further pressured by perceptions from a U.S. presidential debate, where Democratic candidate Kamala Harris was viewed as having an edge over Republican incumbent Donald Trump. The speculation that Trump might lose, potentially affecting his promise of lower corporate tax rates, fueled concerns and led to increased selling by overseas speculators.
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