Nikkei declines amid auto sector losses due to strong yen

Japan’s Nikkei index closed slightly lower on Tuesday as the yen’s rise against the dollar led to selling in automakers’ shares.

According to Reuters, the Nikkei fell 0.1% to 33,354.14 after opening 0.2% higher and trading slightly higher during the session.

The broader Topix index fell 0.2% to 2,367.79 points

“The Japanese market did not reflect Wall Street’s rise last night due to the rise of the yen against the dollar,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

The yen regained its strength as the dollar fell to new lows against major currencies, with China intervening to raise the yuan.

Honda Motor shares fell 2.21%, Toyota Motor shares fell 1.62%, and Mazda Motor shares fell 4.5%.

The automobile sector index fell by 1.75%, becoming the worst performing among the 33 sub-industrial indices on the Tokyo Stock Exchange.

The strength of the yen affects exporters because it harms the value of profits achieved by companies abroad when they are transferred to Japan and calculated in yen.

The Nikkei rose to its highest levels since March 1990 on Monday before reversing course and closing lower.

The performance of commercial companies was weak, with Itochu shares falling 3.66% and Mitsui shares falling 2.9%.