TOKYO: Tokyo stocks fell steeply on Monday as a slew of major exporters absorbed the shock of last week’s decision by the Bank of Japan, bowed to the resurgent yen and readjusted their currency forecasts for a rate of ¥105 against the dollar.
In light trading led in big drops for well-known exporters, equity dealers said that the 3.5 per cent slide in the Topix Index made sense. The companies’ newly conservative yen forecasts, which chime with those of foreign exchange analysts, suggest that companies are girding themselves for a grim slide in profits later in the year.
The first run of forecast changes began last week with Nintendo, Seiko Epson, Mitsubishi Electric and Fanuc all saying they now assume an average ¥105 exchange rate for the financial year to the end of March 2017. For the just-ended 2015-2016 fiscal year, the yen traded on average of ¥120 to the dollar.
