The Swiss National Bank’s scrapping of the franc’s cap against the euro rocked the global financial markets this week. The Japanese financial markets surely weren’t left out of the action, as Japanese stocks retreated Friday after a brief rally in the previous day.
Japanese stocks declined, led by a big tumble in index-heavy shares, during Friday trading. Investors sought safer assets, selling off as the yen rallied in spite of the franc news.
The Nikkei 225 Stock Average dropped 1.4 percent, settling at 16,864.16, the lowest level since back in October 31. The Nikkei fell 1.9 percent overall in the week, the third consecutive weekly loss for the month. The JPX-Nikkei Index 400 also declined, falling 0.9 percent to settle at 12,377.59.
The Topix index finished at 1,363.73, closing about 0.9 percent lower. The index ended up recovering earlier losses, which had amounted to as much as 2.4 percent in the week. Topix closed the week down 1.2 percent overall, again considered its third consecutive weekly loss.
Fast Retailing Co. and SoftBank Corp. led the decline in index heavy shares, both respectively declining 3.7 percent and 2.5 percent.
Other companies, particularly pharmaceuticals, retreated. Chugai Pharmaceutical Co., a company who relies on Swiss imports, declined 2.5 percent. Sosei Group Corp., another pharmaceuticals company relying on Swiss market sales, dropped 4.6 percent.
Companies in other sectors also retreated. Nikon Corp., internationally popular camera maker, rebounded from a 4.4 percent drop to close at around 2.1 percent.
Makita Corp., a power tools manufacturer, fell 2.5 percent to 5,130 yen after the euro hit its lowest levels against the yen in nearly a year.
Despite the declines, market observers noted that ‘now may be the right time for investors to buy up Japanese stocks, particularly if they’re trading on a mid to long term basis, whereas short term traders may want to sell due to the indexes recent lows in December.’