Japanese Yen Slips to Lowest Level in Eight Months
(MENAFN) The Japanese yen tumbled to its lowest level in eight months, slipping to 152 per US dollar on Wednesday as mounting worries over Japan’s fiscal stability intensified and hopes for an interest rate hike by the Bank of Japan diminished.
By 0820 GMT, the yen was trading near 152.4 against the US dollar, marking a roughly 0.3% decline.
Meanwhile, Japan’s benchmark Nikkei 225 index snapped its four-day rally, retreating 0.45% to close at 47,734.99 points. Investors appeared to be locking in gains after the index hit a record high the previous day.
The yen’s decline accelerated following the election of Liberal Democratic Party lawmaker Sanae Takaichi as party leader. Known as a fiscal dove who supports loose monetary policy, Takaichi is expected to assume the role of prime minister later this month, media reported.
At one stage, the yen also dipped to its weakest level against the euro since the currency’s inception in 1999, trading around the 177 mark.
The currency’s depreciation provided a boost to exporter shares by enhancing the value of overseas earnings when converted back to yen. However, losses in US semiconductor and AI stocks overnight weighed on major Japanese tech companies, contributing to the Nikkei’s downturn.
Japan’s Current Account Surplus Contracts
Japan’s current account surplus narrowed by 4.8% year-on-year to 3.78 trillion yen ($24.9 billion) in August, according to a preliminary Finance Ministry report released Wednesday. The decline was attributed to weaker returns on foreign investments.
Despite the reduction, the surplus remained positive for the seventh consecutive month and represented the second-largest August surplus on record.
Primary income, which measures Japanese earnings from overseas investments, fell 11.5% to $28.2 billion, dragged down by lower dividends from banking, insurance, and automotive subsidiaries abroad.
Goods trade swung to a surplus of $694.8 million after posting a $2.5 billion deficit the previous year. Imports dropped 6% to $54.1 billion, partly due to cheaper crude oil prices. Exports edged down 0.4% to $54.8 billion, with shipments of automobiles to the US declining following tariffs imposed by President Donald Trump.
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