Japan's Nikkei 225 Records 2.45% Drop After Hitting ATH

Japan’s Nikkei 225 recorded a drop of 2.45% on 12 July after hitting an all-time high (ATH) of 42,426.77 points on 11 July.

Source: Nikkei 225, CNBC

 Meanwhile, Japan’s national currency, Yen, strengthened against the U.S. Dollar, trading below 160 yen against one dollar. 

The divergent paths of these two market indicators in Japan followed the announcement yesterday of the June inflation figures in the United States:

• The consumer price index (CPI) in the U.S. grew at 3% year-on-year (YOY) in June which is lower than the 3.3% rise in May.
• Since May 2020, it’s the first time that the monthly rate has shown a decrease.
• The CPI at 3% in June is at its lowest level in three years.

The latest readings have increased the possibility of the Federal Reserve cutting interest rates in September.

Consequently, the yen slightly improved its performance as USD/JPY traded as low as 157.43.

Note that last month, the yen had fallen to its 38-year low against the dollar.  

There is speculation in the market that Japan’s finance ministry might have intervened in the matter. 

How Did APAC Market React?

The updated conditions in the U.S. market affected the markets in the Asia Pacific (APAC) region.

As far as the charts are concerned, it’s a mixed bag.

• Japan’s leading stock market index, Nikkei 225, tumbled a bit on Friday. It was trading at 41,190.68 points at the time of writing.  
   
• South Korea’s Korea Composite Stock Price Index (KOSPI) fell 1.19% to 2,857.11 points.
   
• China’s CSI 300 index fell 0.2% to 3,461.26 points.
   
• Taiwan’s Weighted Index (TWII) also fell nearly 2% to 23,783.87 points.
   
• Hong Kong Hang Seng Index (HSI) rose nearly 2% to 18,165.33 points.
   
• Australia’s S&P/ASX 200 rose 0.8%, hitting a 52-week high at 7,959.30 points.
   
• CNBC’s 100 Asia index, an indicator of the top 100 Asian stocks as per CNBC, also dropped 0.12%.