Japan’s Nikkei Ends at 3-week High; Focus on Central Bankers’ Comments (Update 1)

Reuters

12:32 JST, August 22, 2024 (updated at 16:30 JST)

TOKYO, Aug 22 (Reuters) – Japan’s Nikkei share average closed at a three-week high on Thursday, recovering from the index’s sharpest drop in 37 years hit earlier this month, but caution ahead of remarks from central bank heads in Japan and the U.S. capped gains.

The Nikkei rose 0.68% to 38,211.01, its highest close since Aug. 1.

The market was cautious ahead of the remarks by the Bank of Japan Governor (Kazuo) Ueda as well as Federal Reserve Chair (Jerome) Powell later this week, said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

Also, with the Nikkei recovering to this level, some players wanted to sell stocks at a rally.

The Nikkei plunged 12.4% on Aug. 5 in its biggest decline since the 1987 Black Monday crash but bounced back 10% the following day.

The index is still below its July peak above 42,000 but has risen 23% from its Aug. 5 low.

Foreign investors exited Japanese cash equities worth 47.9 billion yen ($329.78 million) in the week ended Aug. 17, after about 521.9 billion worth of net purchases in the prior week.

The market focus is also on Powell’s keynote speech at Jackson Hole and a special session of Japan’s parliament on Friday, where BOJ’s Ueda will speak.

Uniqlo-brand owner Fast Retailing rose 2.5% to boost the Nikkei the most. Silicon wafer maker Shin-Etsu Chemical jumped 2.75%.

Technology investor SoftBank Group fell 1.25% and weighed on the Nikkei the most.

The broader Topix rose 0.25% to 2,671.4.

Japan Tobacco rose 1.41%, after the tobacco and drink maker agreed to acquire U.S.’ Vector Group in an around $2.4 billion deal.

The drug sector rose 1.56% to become the top performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.

Banking, down 1.3%, was the worst performing sector.

($1 = 145.2500 yen)