Japan’s top financial diplomat Masato Kanda is scheduled to speak too and as one of the country’s top voices on exchange rates, anything he says on the yen will be listened to attentively.
The yen has recovered from historically low levels recently, back in line with what Kanda and others might consider ‘fundamentals’ – it rose 2% against the dollar last week, its biggest rise since July.
This helped drive the Nikkei’s 2.2% slide on Monday, its biggest loss since October. Having reached a record high above 40,000 points last week, Japan’s benchmark index was always vulnerable to a correction.
That may have more to run as speculation intensifies that the Bank of Japan is about to make a landmark shift away from its ultra-loose policy. The BOJ said it made no purchases of exchange-traded funds on Monday despite the slide in Japanese stocks, stoking that speculation even further.
The broader correction in Asian equities on Monday was much shallower, however, thanks to a solid rise in China, and Wall Street’s decline was mild too. That said, the Nasdaq was again the biggest decliner of the three major U.S. indices, and after sliding 5.5% on Friday market darling Nvidia fell another 2%.
Is risk appetite beginning to crumble? Perhaps, although bitcoin smashing through $70,000 to a record high $72,910 on Monday would suggest otherwise.
