Tokyo stocks fall to two-month low on Mnuchin’s remarks

TOKYO, Tokyo stocks fell on Monday to a two-month low as remarks by US Treasury Secretary Steven Mnuchin drew concern that the US would apply currency manipulation rules to trade deals with Japan.

The benchmark Nikkei 225 Stock Average on the Tokyo Stock Exchange (TSE) lost 423.36 points, or 1.87 percent, from Friday to 22,271.30, the lowest closing level since August 21.

The broader Tokyo Stock Price Index, which includes all shares on the market’s First Section on the TSE, also ended down 27.01 points, or 1.59 percent, to 1,675.44.

Sell orders overwhelmed Tokyo stocks on concerns over exporters’ future profits after Mnuchin told reporters in Indonesia’s Bali on Saturday following the International Monetary Fund and World Bank annual meetings that the US wants to include an agreement to prevent competitive currency devaluations in future trade deals, including with Japan.

Washington pushed to insert such the currency chapter into the new deal that replaced the North American Free Trade Agreement involving Canada and Mexico.

“Our objective would be that the currency issues. We’d like to include (them) in future trade agreements. With everybody. I’m not singling out Japan on that,” Mnuchin said.

A stronger yen cuts the value of Japanese exporters’ profits, such as automakers and electronics companies.

Source: Kuwait News Agency