Japan’s Nikkei Ends Firmer as Investors Buy Shares after Sharp Drop (Update 1)

Reuters

12:15 JST, June 18, 2024 (updated at 15:30 JST)

TOKYO, June 18 (Reuters) – Japan’s Nikkei share average rose on Tuesday as investors bought stocks after sharp losses in the previous session.

The Nikkei rose 1% at 38,482.11. The index fell 1.8% on Monday, slipping below the psychologically key 38,000 level for the first time this month.

The broader Topix ended 0.58% higher at 2,715.76.

The Nikkei fell more than it should have in the previous session, so investors bought back stocks, said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

But the market does see any good news to lift the index further or bad news to push it lower at the moment.

Chip-making equipment maker Tokyo Electron rose 2.7% to provide the biggest boost to the Nikkei.

TDK jumped 6.32% after the electronic parts maker said it successfully developed materials for all-solid-state batteries with 100 times the energy density.

Uncertainties about the Bank of Japan’s policy path weighed on investor sentiment, limiting the Nikkei’s advance, strategists said.

At its policy meeting on Friday, the BOJ said it would start trimming its bond purchases and also announce a detailed plan in July on reducing its nearly $5 trillion balance sheet.

How much the BOJ will reduce the bond buying amounts will remain unclear until the next policy meeting and the market does not like to have uncertainties, Suzuki said.

The BOJ maintained its short-term policy rate target in a range of 0-0.1%, as expected.

I do not think the BOJ can raise rates as early as next month, as macro data won’t justify the rate hike, said Naoki Fujiwara, senior general manager at Shinkin Asset Management.

Of the 225 Nikkei components, 165 stocks rose and 59 fell, with one flat.

The pharmaceuticals sector lost 1.14% to become the worst performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.