Nikkei falls, yen rallies after BOJ keeps policy steady – CNBC

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Following the BOJ’s decision and the yen’s strength, major Japanese exporters saw their shares tumble, with Toyota, Nissan and Honda down between 2.74 and 3.55 percent. A stronger yen is usually a negative for exporters as it reduces their overseas profits when converted into local currency.

“However, in the last ten years, Japan’s exporters’ currency sensitivity has been reduced,” Masakazu Takeda, portfolio manager at Hennessy Japan Fund told CNBC’s “Capital Connection.”

Takeda said as an example, every time the dollar weakened by 10 yen, Toyota’s operating profits declined by about 13 percent. “That’s down from 20 percent ten years ago,” he said, adding, “Companies have been making efforts to reduce the currency sensitivity.”

Japanese banking stocks also sold off sharply, with shares of Mitsubishi UFJ down 5.06 percent, SMFG down 5.21 percent and Nomura tumbling 9.41 percent. Nikkei index heavyweight Fast Retailing sold off 5.05 percent.

Prior to the BOJ, on early morning Thursday, the Reserve Bank of New Zealand (RBNZ) left its official cash rate unchanged at 2.25 percent.

In its monetary policy statement, the central bank said the global growth outlook had deteriorated due to weakness in China and other emerging markets. The bank expects local inflation to strengthen as “effects of low oil prices drop out and as capacity pressures gradually build.”

The benchmark NZX 50 was up 0.48 percent, while the New Zealand dollar climbed 1.45 percent to $0.6929 in the late-afternoon local time, following the RBNZ decision.

Nikkei falls, yen rallies after BOJ keeps policy steady – CNBC}