Japanese Stocks Decline Amid Yen Surge and Monetary Policy Tightening Expectations
Japanese stocks fell at the close of trading on Thursday, impacted by the strengthening yen and growing expectations
that the Bank of Japan will continue tightening borrowing costs.
The decline was also influenced by global trade tensions resulting from policies introduced by U.S. President Donald Trump.
Topic
Japan
The Nikkei 225 index closed down 1.24%, losing 486 points to settle at 38,678 points,
while the broader Topix index declined 1.18% to 2,734 points.
This downturn coincided with a 0.90% drop in the U.S. dollar against the yen,
bringing the exchange rate to 150.11 yen per dollar, the highest level for the yen in over two months.
The yen’s appreciation followed expectations that the gap between borrowing costs in Japan
and the U.S. may narrow as the Bank of Japan continues to raise interest rates.
A Reuters survey showed that economists anticipate another rate hike from the Bank of Japan by the third quarter,
bringing the key interest rate to 0.75%.
These expectations also pushed Japan’s 10-year bond yield up by one basis point to 1.448%,
marking its highest level since November 2009, adding further pressure on the Japanese stock market.
Alibaba
Alibaba Reports Strong Quarterly Results Driven by E-Commerce and AI Growth
It posted better-than-expected financial results for the third fiscal quarter,
fueled by strong revenue growth in its e-commerce sector at the end of last year
and promotional campaigns that attracted price-conscious consumers.
In a statement released on Thursday, CEO Eddie Wu highlighted significant progress in the company’s strategy,
which focuses on consumer needs and increased reliance on artificial intelligence.
He also noted that AI-driven product revenues have grown at a triple-digit rate for the sixth consecutive quarter,
with expectations for sustained momentum supported by advanced technologies.
Despite the strong financial performance, Alibaba’s stock in the Hong Kong market dropped 2.6%,
closing at HK$120.9 ($15.54 USD).
Meanwhile, its U.S. depositary receipts (ADRs) traded on the New York Stock Exchange rose 6.2% in pre-market trading,
reaching $133.6 USD as of 2:16 PM Mecca time.
Third Fiscal Quarter Results (For the period ending December 2024):
- Revenue: ¥280.15 billion ($38.58 billion), up from ¥260.3 billion in the same quarter of 2023,
surpassing expectations of ¥279.34 billion, reflecting an 8% growth. - Adjusted Earnings Per Share: ¥21.39, marking a 13% increase from the previous quarter’s ¥18.97.
- Net Income: ¥46.43 billion, surging 33% from the previous quarter’s ¥10.71 billion.
The Japanese stock market faces continued volatility due to shifts in monetary policy and currency fluctuations,
while Alibaba’s strong performance highlights the growing influence of AI and e-commerce in shaping global markets.
Japanese Stocks Decline Amid Yen Surge and Monetary Policy Tightening Expectations