Japan's Nikkei Stock Index Drops 9% In 2022 For 1st Yearly Fall In 4 Years

The benchmark Nikkei stock index finished the year down 9.4 percent on Friday, its first yearly fall in four years, as the result of aggressive monetary tightening by central banks offset the impact of solid corporate earnings with the yen's historic fall, Kyodo reported

TOKYO, (UrduPoint / Pakistan Point News - 3rd Jan, 2023 ):The benchmark Nikkei stock index finished the year down 9.4 percent on Friday, its first yearly fall in four years, as the result of aggressive monetary tightening by central banks offset the impact of solid corporate earnings with the yen's historic fall, Kyodo reported.

In the final trading day of the year, the 225-issue Nikkei Stock Average ended up 0.83 points, or 0.00 percent, from Thursday at 26,094.50. The broader Topix index finished 3.56 points, or 0.19 percent, lower at 1,891.71.

On the top-tier Prime Market, gainers were led by marine transportation, bank and retail issues. Mining, oil and coal product, and food shares were among the worst performers.

The yen firmed to the lower 132 level against the U.S. dollar in Tokyo amid a decline in long-term U.S. Treasury yields. The Japanese currency had weakened to near the 152 level in October, losing about 38 yen in value since its strongest level in January, its biggest yearly drop in 40 years.

At 5 p.m., the dollar fetched 132.13-15 yen compared with 132.98-133.08 yen in New York and 133.78-80 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.0651-0652 and 140.74-78 yen against $1.0656-0666 and 141.74-84 yen in New York and $1.0623-0625 and 142.12-16 yen in Tokyo late Friday afternoon. The yield on the benchmark 10-year Japanese government bond fell 0.035 percentage point from Thursday's close to 0.410 percent.

The Nikkei started 2022 at around 29,000 but fell early in the year.

The index fell briefly below 25,000 in March.

Aggressive monetary tightening in the United States to tame soaring inflation caused the yen to fall sharply against the dollar, with the Japanese currency hitting a 32-year low in October, as investors rushed to sell the yen and buy the dollar on expectations of a wider interest rate differential.

The yen's historic fall pushed up profits of companies with high exposure to overseas markets such as automakers and technology companies. Net profit at Mazda Motor more than tripled in the six months ended September. Nintendo posted a record net profit for the period.

But seemingly endless interest rates hike by the Fed and European central banks gradually led to fears over a global recession, triggering risk-averse sentiment and causing selling pressure on Tokyo stocks.

On Friday, the Nasdaq's rise boosted some technology-related shares, with electric appliance maker Omron climbing 110 yen, or 1.7 percent, to 6,405 yen, and electric component maker TDK advancing 40 yen, or 0.9 percent, to 4,335 yen.

Nippon Yusen rose 24 yen, or 0.8 percent, to 3,110 yen, while Kawasaki Kisen gained 70 yen, or 2.6 percent, to 2,787 yen. Among Prime Market issues, advancing issues outnumbered decliners 895 to 843, while 100 ended unchanged.

Trading volume on the Prime Market fell to 881.80 million shares from Thursday's 1,021.78 million.