Against the backdrop of yesterday’s stronger yen, the Nikkei 225 fell back in the Tokyo market. With the yen having been assumed to remain around ¥160 to the dollar, auto stocks fell broadly on concerns that weaker export profitability would weigh on earnings.
In the Tokyo foreign exchange market yesterday, 8 September, the yen briefly strengthened into the ¥152 range against the dollar, reaching its strongest level in about 7 months. Yen buying reportedly advanced against expectations of a narrowing interest-rate differential between Japan and the United States, while moves of more than ¥1 were seen in the afternoon session.
The Nikkei 225 fell for the first time in 3 trading days, closing at ¥65,269.33, down approximately ¥1,130 from the previous day. Selling spread across export-related stocks amid concerns over weaker profitability, with declines particularly pronounced in the automotive sector.
Nikkei investment information indicated that auto stocks had fallen to one-month lows, with Toyota Motor’s closing price down more than 4%. It also suggested that revisions to exchange-rate assumptions based on a stronger yen could affect earnings forecasts. Specifically, the stronger yen would weaken export profitability and reduce operating profit.
According to a Nikkei article dated the same day, the decline in auto stocks extended beyond Toyota to Nissan Motor, Honda, Mazda and a broad range of other companies. Across the automotive sector, revisions to exchange-rate assumptions from the second half onward were said to have the potential to affect full-year earnings forecasts.
Companies have raised their assumed exchange rate for the fiscal year ending March 2027 to ¥160 to the dollar, highlighting concerns that further yen appreciation would weaken profitability.