Japanese Shares Wobble as Yen Hits 40-Year Low

The Nikkei 225 and Topix indexes traded around the flatline on Tuesday, lacking clear direction as the yen weakened to its lowest level in four decades, raising concerns among policymakers and keeping investors alert for potential currency intervention by Tokyo. Market participants also looked ahead to the resumption of US-Iran peace talks in Doha, Qatar, with lower oil prices helping ease inflation concerns in Japan. On the economic front, Japan’s industrial production increased less than expected in May as tensions in the Middle East continued to threaten supply chains and keep energy costs elevated. Trading was mixed, with Tokyo Electron (+2.2%), Taiyo Yuden (+2.4%), and Fujikura (+3.8%) posting solid gains, while Kioxia Holdings (-2.5%), SoftBank Group (-1.9%), and Advantest (-0.9%) finished lower.

The Nikkei 225 Index rose 0.15% to close at 69,468, while the broader Topix Index gained 0.47% to 3,982 on Monday, reversing earlier losses as bargain hunters returned to pick up beaten-down stocks. Investors also kept a close watch on developments in the Middle East following renewed clashes between the US and Iran around the Strait of Hormuz, although both sides agreed to suspend further attacks ahead of peace talks scheduled for this week in Doha, Qatar. On the domestic front, data showed Japan's retail sales increased 5.3% in May, the fastest pace since November 2023, supported largely by a government stimulus package that boosted consumer spending. Among individual stocks, strong gains were recorded by Taiyo Yuden (10.9%), Tokyo Electron (2.4%), Sony Group (3.1%), Nintendo (5.3%), and Disco Corp (1.3%).

The Nikkei 225 Index decreased 284 points or 0.41 percent on Monday to close at 69077 points. The decline was led by Furukawa Electric (-90.48%), Sumitomo Electric (-76.33%) and Sumitomo (-75.17%). On the upside, the strongest performers were Taiyo Yuden (10.67%), J Front Retailing (6.35%) and Nintendo Co (6.13%).