Asian markets closed lower on Thursday, shadowed by the Japanese yen’s fall to a 38-year low against the US dollar, which has stirred expectations of intervention by Japanese authorities. Finance Minister Shunichi Suzuki has voiced the government’s concerns and its readiness to take necessary measures, reflecting the deep impact of the weakening currency on the nation’s economy. Amidst these developments, Japan’s annual retail sales growth in May outperformed market forecasts, suggesting some resilience in consumer spending. Contrary to the regional downtrend, India’s stock market achieved new milestones, with the Sensex surpassing the 79,000-mark for the first time, and the Nifty reaching a new lifetime high. This surge was supported by robust domestic economic data and optimism surrounding the Union Budget 2024-2025. However, the broader MSCI Asia Pacific gauge was on track for its first loss in three days, influenced by Micron Technology’s disappointing sales outlook and its impact on tech stocks, including Nvidia. Across the Pacific, the US market awaits key economic data releases, including the personal consumption expenditures index, which could signal future interest rate directions. As the global financial community braces for these developments, the strength of the US dollar continues to shape market dynamics, affecting capital flows and the competitiveness of currencies in the Asia-Pacific region.
Key points
- The Japanese yen has reached a 38-year low against the dollar, leading to statements by Finance Minister Shunichi Suzuki about potential intervention.
- Despite negative trends in Asian-Pacific markets, India’s Sensex broke the 79,000-mark, buoyed by domestic economic strength.
- Market sentiment is cautious ahead of the upcoming US inflation report, which may influence central bank interest rate decisions.
