Asia report: Markets slide as yen weakens further against the dollar

The yen fell to 160.82 per dollar late Wednesday, according to FactSet, casting a shadow over market performance in the region.

“After a decline in late trading for major US tech titans, Asian markets also experienced a drop,” said TickMill market analyst Patrick Munnelly.

“The yen, which had plummeted on Wednesday, stabilised, leading to speculation that the government may step in to support the currency.

“With South Korea, China, Japan, and Hong Kong stocks all falling, the MSCI Asia Pacific index was on track for its first loss in three days.”

Munnelly noted that, following Micron Technology's disappointing projection, which did not meet the high expectations for the tech sector that had been driving the stock market's growth, US equity futures also decreased.

“The yen bounced back by 0.3% after dropping 0.7% to JPY 160.87 per dollar - its lowest point since 1986.”

Markets in the red across the region

In Japan, the Nikkei 225 dropped by 0.82%, closing at 39,341.54, while the Topix index fell 0.33% to 2,793.70.

Major losers on Tokyo’s benchmark included Dainippon Screen Manufacturing, down 5.73%, Japan Exchange Group, which declined 3.39%, and Japan Tobacco, falling 2.93%.

Chinese markets also suffered, with the Shanghai Composite falling 0.9% to 2,945.85 and the Shenzhen Component plummeting 1.53% to 8,849.70.

Among the hardest-hit stocks in Shanghai were Beijing Vantone Real Estate, which plunged 10.01%, Shandong Gold Phoenix, down 9.99%, and Orient Group, falling 9.88%.

Hong Kong's Hang Seng Index experienced the steepest decline in the region, dropping 2.06% to 17,716.47.

Significant losses were seen in Nongfu Spring, which tumbled 7.49%, Xiaomi Corporation, down 7.18%, and Xinyi Glass Holdings, which decreased by 6.59%.

South Korea's Kospi index fell 0.29% to 2,784.06, with Hanssem declining 7.99%, Hyundai Elevator dropping 6.29%, and Kogas down by 6.18%.

In Australia, the S&P/ASX 200 slipped 0.3% to close at 7,759.60.

Leading the losses in Sydney were Growthpoint Properties Australia, which fell 6.03%, Mirvac Group, down 5.97%, and GPT Group, which declined by 5.87%.

New Zealand's S&P/NZX 50 also saw a decline, falling 0.99% to 11,717.43, as Synlait Milk dropped 6.25%, Arvida Group fell 5.1%, and Skellerup Holdings decreased by 4.57%.

In currency markets, the dollar was last down 0.22% on the yen, trading at JPY 160.46.

The greenback also weakened against the Aussie and Kiwi dollars, falling 0.32% on the former to AUD 1.4995, and retreating 0.32% against the Kiwi to change hands at NZD 1.6388.

Oil prices saw a slight increase, with Brent crude futures last up 0.57% on ICE to $85.74 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.57% to $81.36.

Yen weakens further against the dollar, Japan retail sales rise past forecasts

At the top of the agenda on Thursday was the yen, which fell to a near 38-year low against the dollar, reaching JPY 160.82 late Wednesday according to FactSet data.

By Thursday afternoon, the yen had slightly strengthened to JPY 160.42.

It followed a similar dip two months ago, which led to Japan's first currency intervention since 2022.

Finance minister Shunichi Suzuki had expressed concern over the currency's impact on the economy, and indicated potential government action to stabilise the situation, according to Reuters.

In domestic economic news, Japan's retail sales saw a significant increase, rising 3% year-on-year in May, according to government data released on Thursday.

That surpassed the market forecast for a 2% rise, suggesting stronger consumer spending.

Elsewhere, China reported a modest rise in industrial profits for May, with large companies experiencing a 0.7% year-on-year increase, as per the National Bureau of Statistics.

That marked a slowdown from the 4% growth seen in April.

The profit boost was largely attributed to higher commodity prices, which benefitted mining firms.

Profit declines in the mining sector eased to 16.2% for the January-to-May period, compared to an 18.6% drop a month earlier.

Reporting by Josh White for Sharecast.com.