Japan’s Nikkei stock average fell in morning trading on Wednesday, with a stronger yen dragging down local stocks as investors turned cautious ahead of revisions to U.S. jobs data.
By midday, the Nikkei was down 0.7 percent at 37,805.35, while the broader Topix index was down 0.6 percent at 2,655.29.
The yen strengthened overnight, trading around 145.36 per dollar, after hitting 147.34 the day before. A stronger yen typically has a negative impact on the stocks of exporters, as it reduces the value of overseas earnings when they are converted back into yen.
Investors are also awaiting the release of preliminary revisions to benchmark US employment data for the 12 months to March, due later on Wednesday. While recent economic data has eased fears of an impending US recession, markets remain highly sensitive to employment-related figures.
Charu Chanana, global market strategist and head of FX strategy at Saxo, said that if revisions show significantly fewer jobs will be created than previously estimated, this could trigger market volatility and renew concerns about the US labor market.
Earlier this month, a weak US jobs report raised concerns about the risk of a hard landing for the world’s largest economy.
Market participants are also closely watching Federal Reserve Chairman Jerome Powell’s comments at the Jackson Hole Economic Symposium on Friday, hoping for confirmation that the Fed is on track for a small rate cut in September.
Major chip-related stocks were among the biggest losers, tracking declines in their U.S. counterparts: Tokyo Electron fell 1.5 percent and Advantest dropped about 3 percent.
Elsewhere, Seven & I Holdings rose 3.3% after a fall on Tuesday as investors continued to weigh a proposed takeover of Canada’s Alimentation Couche-Tard. Meanwhile, shares of cosmetics company Shiseido fell around 5%, making it the biggest percentage loser of the day.
(With contributions from Reuters)
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