Home / Business and Economy / Yen Surges, Nikkei Plunges Below 50,000
Yen Surges, Nikkei Plunges Below 50,000
16 Dec
Summary
- Nikkei average fell 1.56 percent, ending below 50,000.
- Yen strengthened on safe haven buying and rate hike expectations.
- Chip and AI stocks led losses, with Yaskawa Electric plunging 7 percent.
Japanese financial markets experienced a sharp decline, as the Nikkei average tumbled 1.56 percent to finish below the significant 50,000 threshold for the first time in over three months. This downturn was primarily driven by a strengthening yen, fueled by safe haven demand and speculation surrounding a potential Bank of Japan interest rate hike expected later in the week.
The broader Topix index also suffered, settling 1.78 percent lower amid volatility in the bond market. Technology sectors were particularly affected, with significant losses observed in chip and artificial intelligence-related companies. Renesas and Shin-Etsu Chemical each saw declines of 4-5 percent, while robotics firm Yaskawa Electric experienced a substantial 7 percent plunge.
Investors were also factoring in December's Purchasing Managers' Index (PMI) data, which indicated a slight moderation in the overall economic momentum. This confluence of factors, including currency movements, interest rate expectations, and economic indicators, contributed to a broadly negative sentiment across Japanese equities.
