Japanese yen slumps to 32-year low vs. U.S. dollar, Nikkei ends lower on U.S. recession woes

An electronic display shows a real-time exchange rate of the Japanese yen against the U.S. dollar in Tokyo, Japan, Oct. 20, 2022. (Xinhua/Zhang Xiaoyu)

TOKYO, Oct. 20 (Xinhua) -- The Japanese yen dropped past the psychologically important 150 level versus the U.S. dollar on Thursday, marking the first time the currency has dropped to this level since 1990.

Market analysts here said the U.S. dollar was bought on continued speculation the U.S. Federal Reserve will forge ahead with its aggressive interest rate hikes to tackle soaring inflation in the country, which sent long-term U.S. 10-year Treasury yields surging.

The Fed's continued aggressive monetary tightening policy, in stark contrast to the Bank of Japan's commitment to its ultra-loose policy, has seen a widening interest rate gap between the two countries and is catalyzing yen selling, they explained.

Concerns over an economic slowdown in the world's largest economy saw U.S. shares retreat overnight, with the benchmark Nikkei stock index tracking losses and technology shares here retreating in lockstep with their U.S. peers.

Japan's Nikkei Stock Average closed in negative territory, losing 250.42 points, or 0.92 percent, from Wednesday to close the day at 27,006.96.

The broader Topix index, meanwhile, lost 9.65 points, or 0.51 percent, to finish at 1,895.41.

Brokers here said expectations for the tech-heavy Nasdaq to lose further ground later Thursday, in part due to electric car maker Tesla Inc.'s shares dropping during after-hours trading Wednesday after reporting worse-than-expected sales, pressured technology issues here.

Nikkei heavyweight Tokyo Electron dropped 2.3 percent, while electronics maker Kyocera lost 1.5 percent.

Uniqlo clothing store operator Fast Retailing, another heavily weighted component, was another notable drag, ending 2.2 percent lower.

Precision instrument, electric appliance, and glass and ceramic product-linked issues comprised those that declined the most, and falling issues outpaced rising ones by 1,250 to 497, while 90 ended the day unchanged.

On the Prime Market on Thursday, 1,044.53 million shares changed hands, rising from Wednesday's volume of 957.04 million shares.

The turnover on the penultimate trading day of the week totaled 2,545.31 billion yen (16.98 billion U.S. dollars).