TOKYO, (Pakistan Point News - APP - 18th Augst,2016) : Tokyo shares slumped on Thursday as fading expectations of an imminent Federal Reserve rate hike sparked a rally in the Yen against the dollar, hitting exporters including Toyota and Nissan. A rise in the yen is a negative for Japan Inc, making exporters less competitive and hurting their profitability. Minutes from the US central bank's July meeting said policymakers were keeping their "options open.
" But its cautious tone did little to raise hopes for a rise in US borrowing costs, which would tend to lift the greenback by stirring demand for dollar-denominated assets. In Tokyo, the Dollar fell to 99.86 yen from 100.28 yen Wednesday in New York on the news. "The minutes struck a cautious note against any rushed rate hike decision, while continuing to support the idea of a moderated rate increase," Mitsushige Akino, an executive officer at Ichiyoshi Asset Management, told Bloomberg News.
"The odds are for a December hike, rather than a September one, and the yen looks set to extend gains from here." By the close, the benchmark Nikkei 225 index shed 1.55 percent, or 259.63 points, to 16,486.01, while the broader Topix index of all first-section shares also fell 1.55 percent, or 20.34 points, to 1,290.79. The Japanese market came under further pressure after fresh data Thursday showed exports slipped in July as shipments of vehicles, ships and steel products fell.
The gloomy figures served as the latest reminder of the impact of a stronger yen. Toyota shed 1.76 percent to finish at 5,900 yen, while rival Nissan was down 2.56 percent at 961.1 yen and Mazda slumped 3.88 percent to 1,509 yen. Utilities also dragged the market down, with Fukushima-operator Tokyo Electric Power tumbling 4.16 percent to 345 yen and Kansai Electric down 3.36 percent at 842.2 yen.