Tokyo: Tech helps Japanese shares rise after solid Wall Street gains

JAPANESE shares advanced on Friday (Jun 24), with tech stocks leading the rise after sharp overnight gains on Wall Street, while sentiment was also aided by the domestic central bank’s loose monetary policy.

The Nikkei share average rose 1.2 per cent to 26,491.97, accelerating gains after US futures climbed. The index posted a weekly gain of 2 per cent, but has fallen 2.9 per cent so far this month.

The broader Topix rose 0.81 per cent to 1,866.72 and marked a 1.7 per cent weekly gain.

Overnight, Wall Street’s main indexes posted solid gains, fuelled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession.

“Recent losses in domestic equities were driven by concerns about an economic slowdown due to the Federal Reserve’s tightening monetary policy but Japan’s environment is different,” said Shigetoshi Kamada, a general manager with Tachibana Securities’ research department.

“Japan’s stock market is in a favourable position. But whether this situation will continue in the long term is questionable and it will depend on the direction of US interest rates.”

The Bank of Japan last week maintained ultra-low rates, even though several central banks across the globe have tightened policies to tame rising inflation, which is spurring fears of a potential recession.

In Japan, chip-making equipment maker Tokyo Electron rose 4 per cent and provided the biggest boost to the Nikkei. Technology investor SoftBank Group rose 2.4 per cent and air-conditioning maker Daikin Industries climbed 3.4 per cent.

Drug maker Shionogi & Co jumped 5 per cent after announcing a share buyback.

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Automakers dropped, with Mitsubishi Motors shedding nearly 8 per cent to become the worst performer on the Nikkei. Toyota Motor and Subaru slipped 0.71 per cent and 2.89 per cent, respectively, after the 2 car makers announced recalls of their first mass-produced electric vehicles for the global market. REUTERS