Currency woes hit the Japanese markets again on Thursday, as the yen plunged below ¥100 to the U.S. dollar for the third time since the U.K.'s Brexit vote roiled global currency markets at the end of June. The Nikkei 225 closed down 1.55% at 16,486.01 while the broader Topix also finished the day off 1.55% at 1,290.79.
The yen's movement was largely attributed to the weakness of the dollar, in the wake of yesterday's mixed signals on interest rates from the U.S. Federal Reserve, and the dollar later rose again to cross that psychologically important ¥100 threshold. But the currency's ongoing strength against the greenback has hit exports. The latest government figures, released in the morning local time, show exports declined 14% year-on-year in July, worse than economists' expectations for a drop of 13.7% and the biggest monthly fall since October 2009.
However, imports fell even faster, as the economy has failed to respond to repeated government stimuli. Imports fell 24.7% year-on-year, compared with economists' forecasts of 20%. The result: Japan's trade surplus shrank in July to ¥513.5 billion ($5.14 billion) from ¥692.8 billion the month before.
Elsewhere in Asia, Hong Kong's Hang Seng Index bucked the regional trend, rising in the wake of Chinese internet giant Tencent's (TCTZF) (TCEHY) overnight report of a 47% increase in quarterly net profits compared with a year ago. Tencent was recently up 5.39% at HK$203.4 ($26.23) a share, with a market capitalization of HK$1.94 trillion.
Lenovo (LNVGF) (LNVGY) , the world's largest maker of personal computers was up 2.62% at HK$5.49, despite reporting a 6% year-on-year decrease in revenues in the three months to June, continued falling volumes and the struggling smartphone handset business it acquired from Motorola two years ago. The market noted that revenue was nonetheless better than analysts' expectations.
Not every company on the Hong Kong market was sharing the joy, however. Asia focused-conglomerate Swire Pacific (SWRAY) (SWRBF) (SWRBY) , which is a major shareholder in the local airline Cathay Pacific (CPCAF) (CPCAY) , reported a 5% fall in first half revenue compared with January to June last year and a 27% drop in underlying profit. Cathay announced an 82% drop in first half profits the previous day. Swire Pacific, was recently down 1.92% at HK$89.45, with a market capitalization of HK$130.15 billlion.
The Hang Seng was recently up 1.13% at 23,056.50.
In mainland China, the markets closed down after a positive start to the day. The combined Shanghai and Shenzhen CSI 300 was off 0.3% at 3,362.84. In Australia, the S&P/ASX 200 closed down 0.49% at 5,507.82.
On the futures market, the Dow Jones mini was recently up 0.09% at $18,558.00, while on the oil and gas market West Texas Intermediate Crude was up 0.73% at $47.13 and Brent Crude was up 0.22% at $49.96.