Japanese Stocks Slump After US Data Spark Growth Worries
Japanese stocks fell Monday after the latest US jobs data raised concern over the world’s largest economy. Banks and exporters like autos led declines after the yen rallied against the dollar on speculation the Federal Reserve will cut rates.
The broader Topix Index and the blue-chip Nikkei 225 fell at least 2% in early trade, their largest intraday declines since April 11. The yen was up 0.2% against the dollar, after surging more than 2% on Friday.
The latest US employment report showed the steepest downward revisions to jobs growth since the pandemic, with nonfarm payrolls being marked down by nearly 260,000 in May and June combined. The S&P 500 sank the most since May while the dollar snapped a six-day gain.
The drop in Japanese equities comes on the eve of the one-year anniversary of last August’s market meltdown. The benchmark Topix plunged the most since 1987 on Aug. 5, 2024, following the Bank of Japan’s unexpected interest rate hike, coupled with economic concerns in the US. Before Monday’s fall, the gauge had recovered about 30% since.
“I hope this isn’t a repeat of last year,” said David Fandrich, a portfolio manager at Carlson Capital LP, adding that the unwind of the yen carry trade last year contributed to the market selloff, and that complexities from President Donald Trump’s tariffs make the situation different this time. “A stalling US labor market will stoke recession fears, although I think this is very unlikely.”
Japan is in the middle of an earnings season, with the nation’s biggest bank Mitsubishi UFJ Financial Group Inc., as well as Sony Group Corp. and auto exporter Toyota Motor Corp. expected to report this week.
“The rapid strengthening of the yen and weaker US data imply tougher times ahead for large cap exporters,” though domestic-demand oriented small caps may benefit from a stronger currency, said Jamie Halse, chief executive officer at Senjin Capital Pty. “When the US sneezes the world catches a cold, so I would expect increased caution amongst equity investors.”(ayu)
Sumber: Bloomberg
