On the Tokyo Stock Exchange, the flagship Nikkei index ended down 1.09% at 38,220.85 points, the broader Topix index lost 0.73% to 2,691.76 points.
The Tokyo Stock Exchange fell on Monday, weighed down by the toughening tone of the American Federal Reserve and by a plunge in technology stocks across Asia in the wake of Wall Street on Friday, while the banks limited the gloom of the markets Chinese.
The Tokyo Stock Exchange is sinking, the Fed is worried
On the Tokyo Stock Exchange, the flagship Nikkei index ended down 1.09% at 38,220.85 points, the broader Topix index lost 0.73% to 2,691.76 points.
In the wake of the cold snap on Wall Street on Friday, investors are digesting the prospect of a slowdown by the American central bank (Fed) in its monetary easing process, its president Jerome Powell having argued that the battle against inflation was not won.
“Expectations of interest rate cuts (from the Fed), which had supported the US market, have faded. The future Trump administration’s stimulus policies and customs duties are likely to increase inflationary pressure, leading the Fed to keep rates high, underline Tokai Tokyo Intelligence experts.
High rates make it difficult for businesses — and investors — to obtain financing.
Trade remains volatile and cautious. In addition to the threat of increased customs tensions and higher American yields, “the incessant rise of the dollar, which is falling on Asian economies like a wrecking ball” fuels “investor anxiety”, with “the specter of tensions on financing” for firms, explains Stephen Innes, of SPI Asset Management.
Around 06:45 GMT, the greenback rose to 154.52 yen per dollar.
Comments by the governor of the Japanese central bank (BoJ) cautiously reinforcing the possibility of a rate increase in December led to a brief jump in the yen, which penalized exporters like Toyota (-1.03%).
But “the governor’s comments were not as ‘determined to rise’ as the market feared, which put a brake on the appreciation of the yen” and indirectly supported the stock market a little, judged IwaiCosmo analysts Securities.
Tech stocks plunge in Asia, Samsung floats
While technology stocks (Nvidia, Meta, Amazon, etc.) plunged together in New York on Friday, sector stocks also took a hit on Monday in Tokyo: Softbank Group (-2.08%) or chip groups Tokyo Electron (-1.59%) and Renesas (-2.34%).
The rise in American bond rates, and the prospect of a less accommodating Fed, penalizes securities whose valuation depends on expectations of future profits.
Same trend in Seoul, where chip expert SK Hynix fell 3.65% around 06:45 GMT, while sophisticated microprocessor behemoth TSMC dropped 0.97% in Taiwan.
On the other hand, going against the trend, South Korean Samsung Electronics jumped almost 6% in Seoul after announcing a massive share buyback by the company.
Chinese markets diverge, uncertainty dominates
After ending last week in the red, Chinese markets diverged on Monday, in a very volatile climate still haunted by the specter of a trade war after Donald Trump’s return to the White House in January.
Around 06:45 GMT in Hong Kong, the Hang Seng index recovered (+0.78% to 19,578.14 points), but in Shenzhen, the composite index took a nosedive (-2.72%) — at opposite to that of Shanghai (+1.11%).
Chinese e-commerce giant Alibaba lost 1.49% in Hong Kong, after announcing quarterly turnover growth well below expectations.
Above all, banks supported the market like ICBC (+2.83%) or Bank of China (+3.88%), their prices being considered very underestimated.
Oil stabilizes, bitcoin rebounds
Oil prices were trying to stabilize after falling sharply on Friday, in a market weighed down by the prospect of a possible crude surplus by 2025, coupled with a drop in demand against a backdrop of gloomy economic conditions.
Around 06:45 GMT, the price of a barrel of Brent from the North Sea increased by 0.31% to $71.25, and that of American West Texas Intermediate (WTI) increased by 0.19% to $67.15.
For its part, bitcoin regained color at the end of Asian trade, jumping to nearly 92,000 dollars after having oscillated in the previous hours around 90,000 dollars.
