Tokyo: Automakers and semiconductor stocks boosted by falling yen

JAPANESE shares jumped on Thursday (Jul 14) as chip and automakers gained from a drop in yen to a 24-year low amid a relentless surge in the greenback on rising bets of aggressive interest rate hikes in the US.

The Nikkei share average closed 0.62 per cent higher following the afternoon session.

It had opened 0.63 per cent lower this morning after overnight CPI data showed US inflation topped 9 per cent in June, but quickly regained ground once the yen hit 138 to the US dollar for the first time since 1998.

"It is possible the market had priced in a high CPI figure, or that it thinks this is the peak," said Nomura Securities strategist Maki Sawada.

The broader Topix gained 0.23 per cent.

US stocks were down overnight, but all 3 major indices managed to limit their losses after plummeting on the release of the CPI data. "There is a sense of relief that stocks didn't collapse," a market participant at a domestic securities firm said.

Semiconductor and electrical components companies led the Nikkei, tracking overnight gains made by the Philadelphia SE Semiconductor index. Keyence added 3.48 per cent, while Tokyo Electron added 3.33 per cent and Fujikura rose 2.18 per cent.

Suzuki Motor gained 3.21 per cent after announcing last night it would end its involvement in MotoGP in order to focus its resources on sustainability.

Fellow automaker Mazda Motor was up 2.21 per cent.

Uniqlo parent Fast Retailing, one of Nikkei's most influential components, was up 1.49 per cent ahead of today's third-quarter earnings release. The company was forecast to report quarterly profit growth of 11 per cent.

Utilities weighed heavily on the index, down 2.12 per cent overall.

Tokyo Electric Power Company was the worst performer, down 7.66 per cent. On Wednesday, the Tokyo district court ordered 4 former executives to pay 13 trillion yen (S$131.1 billion) in damages in a lawsuit brought by shareholders over the company's handling of the Fukushima nuclear disaster.

Kansai Electric Power and Chubu Electric Power also made losses and were down 2.35% and 1.28%, respectively. REUTERS

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