A financial data screen in Tokyo shows the U.S. dollar hitting the 144 yen level on Sept. 7, 2022. (Kyodo)
TOKYO — The yen weakened to the 144 zone against the United States dollar on Wednesday, hitting a new 24-year low, as investors continued to sell the Japanese currency in anticipation of higher interest rates in the US.
Tokyo stocks fell in the morning as investors grew concerned over a slowdown in the world's largest economy and the global economy as a result of the US Federal Reserve's monetary tightening.
The 225-issue Nikkei Stock Average fell 263.68 points, or 0.95 percent, from Tuesday to 27,362.83. The broader Topix index was down 14.79 points, or 0.77 percent, at 1,911.79.
On the top-tier Prime Market, decliners were led by mining, marine transportation, and electric appliance issues.
The Japanese currency remained weak after breaching the 143 line in New York overnight as stronger-than-expected US non-manufacturing data from the Institute for Supply Management increased the likelihood that the US central bank will carry on with aggressive interest rate hikes, dealers said.
"Robust data led investors to believe that the Fed will keep its hawkish stance… and may implement a 0.75 percentage point rate hike later this month," said Yukio Ishizuki, a senior foreign exchange strategist at Daiwa Securities Co.
The yen continued to fall, tumbling to 144 to the dollar in the early afternoon, despite warnings by Japanese government officials against the yen's rapid depreciation and a threat to take necessary action if sharp falls in the currency continue.
Ishizuki said the "momentum" of dollar-buying will likely prevail for a while after the dollar rose rapidly from 140 yen level on Tuesday.
Domestic importers also bought the dollar for settlement purposes, the dealers added.
At noon, the dollar fetched 143.69-71 yen compared with 142.74-84 yen in New York and 141.53-55 yen in Tokyo at 5 p.m. Tuesday. The yen further slid to the 144 zone shortly after noon.
The euro was quoted at $0.9884-9886 and 142.02-07 yen against $0.9902-9912 and 141.33-43 yen in New York and $0.9975-9976 and 141.18-22 yen in Tokyo late Tuesday afternoon.
Japanese shares were down, tracking overnight losses on Wall Street amid worries that an increase in interest rates will make it difficult for US companies and households to borrow money, impacting the country's economy.
A rise in long-term US Treasury yields after the ISM data weighed on the tech-heavy Nasdaq index, prompting selling in their Japanese counterparts as well, analysts said.
Semiconductor equipment maker Tokyo Electron lost 980 yen, or 2.3 percent, to 41,720 yen, while Advantest shed 160 yen, or 2.1 percent, to 7,560 yen.
Chipmaker Screen Holdings was down 210 yen, or 2.3 percent, at 8,980 yen.
But a weaker yen continued to buoy some exporters, with Subaru up 81.0 yen, or 3.3 percent, to 2,571.0 yen and Mazda Motor up 28 yen, or 2.4 percent, to 1,212 yen.
Among Prime Market issues, declining issues outnumbered advancers 1,517 to 271, while 49 ended the morning unchanged. (Kyodo)
