Japan's Nikkei slump more than 3%

Japanese markets plummeted as the yen's further appreciation to the 148 level against the U.S. dollar clouded the outlook for the country's exporters.

The Nikkei average briefly plunged over 3 percent before ending 2.49 percent lower at 38,126.33, dragged down by auto, electronic and real estate stocks. The broader Topix index settled 3.24 percent lower at 2,703.69.

Toyota Motor slumped 8.5 percent despite posting a 17 percent rise in first-quarter operating profit, in line with expectations.

The yen hit a four-month high versus the dollar, a day after the BOJ chief signaled the possibility of a further interest rate hike.

The headline au Jibun Bank Japan Manufacturing Purchasing Managers Index (PMI) fell from the neutral 50.0 mark in June to 49.1 in July to signal a deterioration in the health of the sector for the first time since April. The reduction was modest, yet the strongest seen for four months.

Overall business conditions among Japanese manufacturers deteriorated for the first time in three months at the start of the third quarter of 2024, with the rate of decline modest overall. There was a renewed contraction in production levels in July, while new order volumes decreased at the strongest rate since March amid subdued demand in both domestic and international markets.

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