TOKYO: Japan’s Nikkei share average rose more than 2% on Thursday, led by exporters as the yen weakened against the dollar on prospects of slower-than-expected future rate cuts by the US Federal Reserve.
The Nikkei had risen 2.6% to 37,317.39 by 0202 GMT.
The dollar rose broadly, recovering from an earlier tumble in the immediate aftermath of the Fed’s outsized rate cut on Wednesday that had been largely priced in by markets.
Against the yen, the greenback gained nearly 1% to 143.56 in Asia trade.
Fumio Matsumoto, chief strategist at Okasan Securities, attributed the dollar’s gains to expectation of slower US rate cuts going forward and the Fed’s comment that the world’s top economy is not doing as bad as the market had worried.
“The (Japanese) market had expected the yen to strengthen after the Fed’s 50-basis-point rate cut and the domestic equities to fall, but it turned out the yen weakened,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
All the 33 industry sub-indexes on the Tokyo Stock Exchange (TSE) were trading higher. Automakers led the advance with a rise of 4.7%.
The broader Topix was up 2,41% at 2,627.18, with Toyota Motor jumping 5.7% to provide the biggest boost, while Honda Motor climbed 4.59%.
Japan’s Nikkei bounces on Wall Street gains, softer yen
Toyota has lost 9.95% so far this month, while Honda is down 5.95%.
Investors had avoided buying automakers this month due to the yen’s gains, said Matsumoto. Uniqlo brand owner Fast Retailing rose 2.95% and was the biggest boost to the Nikkei.
Technology start-up investor SoftBank Group climbed 2.92%. Of the more than 1,600 stocks trading on the TSE’s prime market, 90% rose and 8% fell, with 1% trading flat.
Source: Brecorder
