Japanese stocks fall 1.5% as economic slowdown fears grow after production data

Japanese shares fell more than 1.5 percent on Thursday after data showed that monthly industrial production posted its biggest drop in two years and the yen fell to a 24-year low overnight, stoking fears of an economic slowdown.

The Japanese Nikkei index fell at a steady pace throughout the day and fell 1.54 percent by the end of trading. The broader Topix index was also down 1.20 percent on the day.

The Japanese yen rebounded slightly to trade at 136.17 against the dollar, after hitting its lowest level in 24 years overnight, surpassing the 137 barrier.

Earlier on Thursday, Japan’s Ministry of Economy, Trade and Industry released data showing industrial production fell 7.2 percent in May, the second consecutive monthly decline and the largest monthly decline in two years.

Automakers and other exporters have been affected by the shortage of spare parts and the complications caused by the COVID-19-related shutdowns in China.

Toyota Motor, the world’s largest automaker, fell 1.32% after it failed to meet its production target for May, which was already revised down.

Out of the 225 companies listed on the Nikkei index, 153 of them incurred losses, while 69 companies made gains and only three companies witnessed changes.

The energy sector was the worst performer in the Nikkei, falling 2.77 percent. The oil company, Inpex Corp. closed down 3.61 percent, with Brent crude futures falling 0.09 percent to $116.15 a barrel, on track to record losses for the second consecutive session.

The worst performer was the Japan Financial Services Group, which lost 6.2 percent. Screen Holdings Inc., a semiconductor manufacturer, followed, down 5.37 percent.