Asian Stocks Bounce Back, Erasing Last Week’s Plunge

Asian shares showed mixed performance with Tokyo’s benchmark recovering and stabilizing after last week’s sharp decline.

Written by: Sophia Cruz • Tuesday, August 13, 2024 • 1 min read

• Last updated: Tuesday, August 13, 2024

US Stock markets closed lower for the week

In today’s trading, Asian shares showed mixed performance with Tokyo’s benchmark recovering and stabilizing after last week’s sharp decline.

Asian Stocks Bounce Back, Erasing Last Week’s Plunge

Japan’s Nikkei 225 surged after being closed yesterday, increasing by 3.2% and reaching 36,156.47.

Tokyo’s demand for computer chip stocks was strong, with Tokyo Electron climbing 6.2%, reflecting the robust performance of tech stocks on Wall Street.

Investor sentiment also seemed to improve as the recently volatile yen showed signs of stabilizing. While a weaker yen benefits Japan’s major exporters, like Toyota Motor Corp., by increasing the value of overseas earnings when converted to yen, it also gradually diminishes the nation’s purchasing power.

The Nikkei 225 and the Topix have each dropped by more than 7% since the end of July, following the Bank of Japan’s decision to raise its benchmark interest rate and announce plans to scale back bond purchases. Both indices entered a bear market on August 5, after losses surpassed 20%.

The rate hike initially boosted the yen, but gains were tempted when the central bank clarified that it wouldn’t tighten policy too rapidly to avoid further market turbulence. This led to a global unwinding of carry trades, where investors had used the yen to finance purchases of assets ranging from stocks to emerging market bonds.

Meanwhile, Hong Kong’s Hang Seng index slightly decreased by 0.1% to 17,104.82. The Shanghai Composite dropped 0.4% to 2,846.40.

South Korea’s Kospi remained mostly flat, inching up less than 0.1% to 2,618.36. In Australia, the S&P/ASX 200 edged up by nearly 0.2% to 7,826.80.

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ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.