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Time of India
28-05-2025
- Automotive
- Time of India
Nikkei sheds early gains as mood turns cautious ahead of Nvidia earnings
Japan's Nikkei share average shed early gains of as much as 1.2% to end flat on Wednesday, as the mood turned cautious ahead of earnings from artificial intelligence chip leader Nvidia later in the day. The Nikkei ended the day down 1.71 point at 37,722.40, effectively unchanged but snapping a three-day rally. The broader Topix also finished essentially flat but up 0.02 point at 2,769.51. Japanese stocks were initially buoyed by a sharply weaker yen, which boosts the value of overseas revenues for the country's many heavyweight exporters. However, a poor auction of super-long Japanese government bonds also saw yields pushing higher again, weighing on sentiment. Live Events The Nikkei particularly struggled above the key psychological level of 38,000, after pushing as high as 38,178.73 in morning trading. Some additional push is needed to take the Nikkei firmly above 38,000, such as further positive developments in U.S. tariff negotiations, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. While a weaker yen supports sentiment, "one can't say the foreign-exchange market has stabilized", he added. Despite the more cautious finish to the session, chip-testing equipment maker and Nvidia supplier Advantest remained the Nikkei's biggest gainer in index-point terms through to the close, ending with a 1.6% advance. By contrast, chip-making machinery manufacturer Tokyo Electron flipped from early gains to finish down 0.1%. Automakers as a group had been strong in early trading but ended the day mixed. Honda climbed 1.3%, but Toyota reversed gains to drop 0.3%. Nissan was among the most volatile stocks on the day, leaping as much as 4.6% at the start of the afternoon session following a media report that it plans more than $7 billion in fundraising to help turn the business around. However, it shed those gains to end the day down 0.3%.
Japan Times
22-04-2025
- Business
- Japan Times
Yen on the march as Plaza Accord 2.0 debate grows
While Japan and the United States have busied themselves with trade-war minutia — from bowling-ball tests to soybean purchases — the elephant in the room has quietly made itself known. The value of the yen is suddenly front and center. The United States has claimed that Japan's currency is undervalued, with some people in the administration of President Donald Trump calling for a Plaza Accord 2.0. This is in reference to the 1985 Plaza Accord, an agreement between the U.S. and a number of other countries, Japan included, that led to a dramatic strengthening of the yen. Japan is unimpressed. It insists that the value of the currency should be decided by the markets and that governments shouldn't interfere. So far, negotiators discussing the tariffs placed on Japan by Trump have managed to avoid discussing the yen at all or in any depth, gingerly kicking the can down the road on a highly contentious issue. This week, the question of the currency's value became harder to ignore. In trading on Tuesday, the yen hit ¥139.9 to the dollar, a seven-month high, while Finance Minister Katsunobu Kato left Japan for Washington on the same day. He is Japan's point person on currency issues and is expected to meet with U.S. Treasury Secretary Scott Bessent while in the United States. Many investors, analysts and policymakers are keenly watching the yen, trying to find meaning in its recent moves, and are eager to hear whether the United States brings up the currency issue when Kato is in Washington, and if it does, what it really wants. Some analysts in Japan pour cold water on the idea of another Plaza Accord type of agreement, noting the difficulty of controlling the market and the risk of doing economic damage by even trying. 'Since the issue of the exchange rate has been attracting so much attention in the media, it may come up in the meeting, but I personally think it won't,' said Maki Ogawa, chief analyst at Sony Financial Group. Ogawa said it would be risky for the United States and Japan to meddle in the market. 'The exchange rate might not necessarily stay at levels they would want. When coordinated intervention takes place, the financial markets tend to overshoot,' she said, adding the intervention under the Plaza Accord couldn't really control the market. An intervention of this kind might weaken the dollar against not just the yen but also other currencies, which could lead to an increase in import prices and higher inflation, Ogawa added. Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, believes that the two countries will probably not go into detail this time, as the trade negotiations have just begun. Kato and Bessent will likely just confirm that close communications regarding the currency markets will be maintained, Ichikawa wrote in a report released on Monday. 'I don't think Japan will voluntarily bring it up as an agenda item, so the question is what the United States would propose if it puts the issue on the table,' said Soichiro Tateishi, an economist at the Japan Research Institute. Tateishi said Plaza Accord-type coordinated intervention is highly unlikely, as the strong dollar is not a real problem for many countries, while the recent geopolitical situation makes it tough to successfully execute joint initiatives. Even if Japan and the United States jointly intervene in the market, the impact would probably be insignificant, Tateishi said. One method of addressing the yen's value does make sense to some analysts. They say that adjusting monetary policy might be effective. 'There will be a question whether the Bank of Japan would really raise rates under these circumstances where growth will likely slow,' Tateishi said. 'But when just looking at the currency's underlying trend, a rate hike would likely change it more than randomly coordinated intervention by the two countries.' Ogawa also said the rate hike approach would carry less risk compared to joint intervention, while it's not that hard for the BOJ to justify a rate increase since wages are rising. Japan is also dealing with relatively high inflation, so some yen appreciation would be a plus for households.
