Japan¡¯s Nikkei 225 stock average sank 5% minutes after the opening Monday to a 2026 low as the conflict in the Middle East continued and Brent crude traded above $115 per barrel.?
The benchmark clawed back some of the morning losses and ended the day 2.79% lower at the close.?
At the beginning of the year, the Nikkei 225 was 51,010.28. It reached 59,332.43 on Feb. 26, two days before the United States and Israel carried out an attack on Iran, and has been moving downward ever since.?
It sank to as low as 50,566.99 on Monday morning.?
Stocks in New York fell on Friday as reports indicated the Pentagon is looking at sending additional ground troops to the Middle East, which fueled concern that the war with Iran might become prolonged.?
The yen traded above ?160 to the dollar over the weekend ¡ª a threshold that some investors and traders see triggering government intervention.?
Japan last stepped into the foreign exchange market in July 2024, buying ?5.5 trillion over two days after the currency approached ?162 against the dollar ¡ª its weakest level since 1986. That intervention lifted the yen to the ?157 range, and the currency kept strengthening until October that year.
As with the last move to prop up the yen, the next could coincide with a rate increase by the Bank of Japan, which is set to meet on April 27 and 28 to make its next rate decision.?
¡°The continued weakening of the yen is making rising inflationary pressure in Japan increasingly difficult to ignore,¡± wrote Hideo Kumano, an economist at Dai-ichi Life Research Institute, in a Monday report.?
¡°If the BOJ does not act, the yen¡¯s depreciation will continue, effectively forcing the BOJ¡¯s hand into raising rates,¡± he added.??
The yen moved back below ?160 to the dollar after Atsushi Mimura, vice finance minister for international affairs, made a statement that suggested action could be taken.
He said speculative moves are intensifying in the foreign exchange market, and ¡°decisive measures may soon be necessary if the situation continues.¡±?
News reports last week indicated that the government might choose to intervene in the crude oil futures market in order to strengthen the yen.?
¡°We have already stated that we will respond on all fronts, and our focus is directed in every direction,¡± Mimura said.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.