Nikkei lower as Yen tumbles

The Nikkei opened lower and continued its intraday decline, retreating 2.16% to close at 37,628 points.

The broader index, Topix, also lost ground, closing down 1.74% at 2,664 points. The market now awaits the release of US data and Japan’s monetary policy decision.

Projections suggest that the US Q1 GDP growth rate will be around 2.5%, a decrease from the previous reading of 3.4%. If the actual GDP figure falls below the market consensus of 2.5%, it could weaken the dollar and potentially stabilise the yen against the dollar, thus supporting Japanese stocks.

With the yen weakening beyond 155 per dollar, market participants are looking for any hints of a hawkish stance from the BoJ.

Any indication of tightening monetary policy could exacerbate losses in the Nikkei, which could lead to an end to the nearly decade-long period of accommodative monetary policy that has supported Japanese stocks. The ultra-dovish stance of the BoJ has been a significant support for the Nikkei in recent years.

Stocks declined across the board, with key players such as Tokyo Electron, Toyota, Mitsubishi Heavy Industries, and Fast Retailing witnessing drops of -3.5%, -3.3%, -2.2%, and -3.6% respectively. However, Renesas Electronics, the leading semiconductor manufacturer, bucked the trend with a slight increase of half a percent.