Japan’s Nikkei share average fell on Thursday, reversing much of its gains from the previous session. This drop comes as the yen’s slide past the closely watched 160 per dollar level put traders on high alert for potential intervention. The Nikkei closed down 0.82% at 39,341.54.
Technology shares underperformed, dragging on the benchmark index after a sell-off in U.S. chipmaker Micron Technology in after-hours trading soured the market mood. The broader Topix index slid 0.33% to 2793.70, with a sub-index of growth shares dropping 0.6%, compared with a 0.08% decline for value shares.
Investors are wary of upcoming risk events, including a U.S. presidential debate later in the day and the release of the Federal Reserve’s preferred inflation gauge on Friday. These events could create volatility across all asset classes.
The yen was last at 160.36 per dollar after touching 160.88 overnight, marking its lowest level in 38 years. This significant drop follows a plunge to 160.245 in late April, which triggered an official Japanese currency intervention worth about 9.8 trillion yen ($61.08 billion).
The proximity to the quarter-end may also be influencing markets. The Nikkei experienced a three-day run of increasingly strong advances, culminating in Wednesday’s 1.26% surge.
Picture: Nikkei currently trading at 39409.15 on the VT Markets app.
The technical test for the Nikkei now is whether it can reclaim the May 20 high of 39,437 by the end of the week. If it fails, Wednesday’s rally may have been just an anomaly.
You might be interested: Japan’s Nikkei climbs to mid-April high on value stock surge and weaker yen
In individual stocks, chip-making equipment heavyweight Tokyo Electron slid 2.4%, becoming the biggest weight on the Nikkei. Uniqlo parent company Fast Retailing also fell nearly 2%. At the bottom of percentage losers was chip-related firm Screen Holdings, which tumbled 5.7%.
Overall, the market remains cautious as traders monitor yen movements and upcoming economic data releases. The interplay between currency intervention risks and broader market sentiments will be crucial in determining the Nikkei’s direction in the coming days.
Start trading now — click here to create your live VT Markets account.
