Japan: Nikkei bounces off one-month low on softer yen, Wall Street rally
JAPAN’S Nikkei share average rebounded on Monday (Dec 11) from a one-month low touched last week, after the yen pulled back from a four-month peak and Wall Street rallied on rising bets of a soft landing for the US economy.
The Nikkei finished the day 1.5 per cent higher at 32,791.80, following a broad rally in which 196 of the benchmark’s 225 components rose versus 25 decliners and four that were flat.
The broader Topix rose 1.47 per cent.
Monday’s gains in the Nikkei came after the worst weekly performance since mid-September, which included a 3.4 per cent slide over last Thursday and Friday as the yen strengthened, cutting the value of exporters’ overseas sales.
“The rally is extremely broad, (but) we can clearly see that a big part of it is a natural rebound from last week’s steep declines,” said Maki Sawada, a strategist at Nomura Securities.
“That is probably the biggest factor.”
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US stocks – and particularly high tech shares – rallied on Friday after robust monthly jobs data bolstered speculation that the economy would avoid a recession.
Heavyweight chip-making equipment manufacturer Tokyo Electron was the Nikkei’s biggest support, adding 76 points with a 3.44 per cent jump.
Exporters rose, with Nissan adding 2.53 per cent and Sony climbing 1.92 per cent.
The yen weakened to 145.615 per US dollar on Monday, from as strong as 141.60 late last week.
“So today, when there is some correction of the yen’s rapid appreciation, stocks are rising.”
Energy shares outperformed following a rebound in crude oil prices, with a Tokyo Stock Exchange sub-index of the stocks gaining 3.22 per cent.
The top gainer among the 33 TSE industry groups was the electric and gas utilities sub-index, which rallied 4.83 per cent, led by a 14.63 per cent surge in Tokyo Electric Power Co. REUTERS
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