Japanese Stocks Fall as Geopolitical Concerns Weigh on Exporters
Japanese stocks fell as geopolitical concerns following Israel’s airstrikes on Iran dragged exporters lower. Worries over higher US auto tariffs also pulled down auto shares.
Topix Index dropped 1% to 2,756.47 as of market close in Tokyo
Out of 1,684 stocks in the index, 315 rose and 1,334 fell, while 35 were unchanged
Nikkei declined 0.9% to 37,834.25
Global-facing firms including electric appliance and auto companies declined after Israel launched military strikes on Iran’s nuclear program and ballistic-missile sites.
“As geopolitical risks and uncertain factors continue to spread, the Bank of Japan’s rate hikes will become more distant” and funds are gradually shifting slightly from stocks to bonds, said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management Co.
Chip-related shares led the drop on the Nikkei 225, with Tokyo Electron, Screen and Sumco all falling more than 3%. Declines in sectors that led the recent rally, like semiconductors, are seeing profit-taking due to heightened geopolitical risk, said Hiroki Takei, a strategist at Resona Holdings Inc.
The yen appreciated as much as 0.5% in the morning but later erased gains after Bloomberg News reported that BOJ officials see inflation running a little faster than expected.
The stronger currency added to declines in carmakers such as Toyota Motor, which lost 2.4% and contributed the most to the Topix Index decline. Auto stocks also came under pressure after President Donald Trump said he may raise US tariffs on the sector from their current 25% level in order to boost domestic car manufacturing.
Among gainers Friday were energy companies including Eneos and Idemitsu Kosan as Brent spiked more than 13%, while West Texas Intermediate also soared. Shipping companies also climbed on speculation rising tensions will boost freight rates.
Source: Bloomberg
