FX.co ★ Japanese Shares Fall as Yen Extends Rally

The Nikkei 225 Index declined by 0.8%, dropping below the 53,000 threshold, while the broader Topix Index decreased by 1% to 3,528 on Wednesday. This movement reversed the gains from the previous session, as the yen appreciated to its highest level in three months, exerting pressure on Japanese stocks. Over the past three sessions, the yen has surged approximately 4% due to growing speculation regarding a potential joint US-Japan currency intervention. Meanwhile, the US dollar faced continuous pressure following remarks by President Donald Trump, expressing a lack of concern over its recent depreciation. A stronger yen typically impacts the profit forecasts for Japan’s export-driven sectors and diminishes the attractiveness of domestic investments to foreign investors. The decline was primarily seen among export-oriented companies, with Sony Group dropping 2.6%, Toyota Motor falling 3.3%, and Mitsubishi Heavy Industries declining 2%. Conversely, technology stocks experienced slight gains, buoyed by increases in US megacap stocks ahead of an anticipated series of major tech earnings announcements.