Nikkei Erases Losses after BOJ’s Comment on Weak Yen

Japanese stocks clawed back early losses on Tuesday in response to comments from the Bank of Japan governor on the impact of the weak yen, but investors remained cautious ahead of the bank’s policy decision later in the day.

“In general, a weak yen has some positive effect on exports and capital expenditure by pushing up revenues at companies with operations overseas. On the other hand, it’s true a weak yen weighs on non-manufacturers’ revenues by pushing up import costs,” Kuroda told a parliament committee meeting in the morning.

The Nikkei share average, which started in negative territory, ended the morning session flat at 15,897.31 after flirting with positive territory.  “There were concerns about a negative impact of the weak yen on the economy as well, so his comment was assuring,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.

Reuters

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