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[Tom MoodyParticipant]

Japan’s Nikkei Stock Average Set for Weekly Decline Despite Weak Yen Tailwind

Japan’s Nikkei share average on Friday was headed for its worst week since early November despite the tailwind of a weaker yen, as weakness on Wall Street and caution ahead of major central bank policy decisions weighed.

The Nikkei rose 0.2% to 38,889.95 at the midday recess, but was set to end the week about 1.5% lower.

The broader Topix added 0.11% and was still headed for a weekly drop of about 1.2%, the index’s worst weekly performance since mid-October.

Japanese stocks drew little support from the Bank of Japan’s (BOJ) decision to not hike interest rates on Thursday or from BOJ Governor Kazuo Ueda’s subsequent news conference, where he said considerable time was required to judge the outlook for domestic wages and overseas economies, chiefly the U.S.

This came after the U.S. Federal Reserve signaled a more cautious pace of rate cuts in 2025, after trimming rates by an as-expected quarter point on Wednesday.

The Nikkei lost about 0.7% in each of the last two sessions.

Meanwhile, an invigorated dollar and an out-of-favor yen saw the pair touch 157.93 on the day for the first time since mid-July.

Japanese government bond yields sank to one-month lows.

“Looking at the Nikkei’s rebound today, it feels like it’s narrower than you might expect,” said Maki Sawada, an equities strategist at Nomura Securities.

Traders may be concerned about volatility in the yen going into the weekend, she said.

Finance Minister Katsunobu Kato said authorities are “concerned” about recent foreign exchange moves, threatening to take action if speculative trades were deemed excessive.

Amid lower JGB yields, real estate was the best performer among the Tokyo Stock Exchange’s 33 industry groups, climbing about 3%. Banks, however, were at the bottom, shedding 2.3%.

Carmakers were supported by the weaker yen, which boosts the value of overseas sales. Toyota gained 2.7%.

Kadokawa was set to fall by the daily limit after the media powerhouse behind the “Elden Ring” game announced a capital tie-up with Sony instead of a widely anticipated acquisition. Sony climbed 3.1%.

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