The Nikkei 225 Index fell 0.5% to below 38,300, while the broader Topix Index declined 0.4% to 2,678 on Wednesday, extending losses from the previous session as the yen continued to strengthen amid speculation that the Bank of Japan may raise interest rates next month.
Japanese shares fall as yen strengthens
A stronger yen negatively impacts the profit outlook for Japan’s export-oriented industries and makes Japanese assets more expensive for foreign investors. Traders are also awaiting the latest Tokyo inflation data, which is viewed as a key indicator for nationwide price trends.
Export-heavy sectors led the decline
Export-heavy sectors, such as auto and consumer stocks, led the decline, with significant losses from Toyota Motor (-3.1%), Honda Motor (-2.4%), Nissan Motor (-4.9%), and Fast Retailing (-0.9%). Major tech stocks also faced pressure, including Advantest (-1.3%) and Tokyo Electron (-1.7%).
