Yen Surges as US-Japan Intervention Boosts Asian Markets
Asian stocks were mixed on Monday as the Japanese yen jumped against the US dollar following a joint intervention by the US and Japan to prop up the yen's value. The yen rose to its highest level since late last year, reaching 155.20 against the dollar.
The weak yen has a positive impact on Japanese companies with significant overseas operations, increasing their profits in yen terms. It also attracts foreign tourists who enjoy strong purchasing power in Japan. However, a cheap currency weakens Japan's overall purchasing power, pushing up costs for oil and other imports needed to run its economy.
In share trading, the Nikkei 225 index fell 1.9% to 63,140.68, while the Kospi in South Korea dropped 4.5% to 6,298.75. The Hang Seng index in Hong Kong gained 0.6%, and Taiwan's Taiex rose 0.7%.
The lull in fighting in the Middle East led to a decline in oil prices, with US benchmark crude falling 4.8% to $80.58 per barrel and Brent crude dropping 5% to $83.87 per barrel.