Reuters

Japan’s Nikkei Stock Average Touches One-Month High in Choppy Trade (Update 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

Reuters

12:42 JST, September 2, 2024 (updated at 15:50 JST)

TOKYO, Sept 2 (Reuters) – Japan’s Nikkei share average rose on Monday to touch the 39,000 level for the first time since late July, helped by a softer yen and Wall Street’s gains at the end of last week.

The Nikkei closed 0.1% higher at 38,700.87. It hit its highest since July 31 at 39,080.64 earlier in the day before trade turned choppy as profit-taking started and the yen’s slide stalled.

The broader Topix also finished up 0.1% at 2,715.99.

Wall Street stocks gained on Friday after fresh economic data raised expectations that the U.S. Federal Reserve would cut interest rates modestly in September. U.S. markets are closed on Monday for a public holiday.

The dollar gained against the yen following the latest U.S. economic data, lifting the shares of Japanese exporters.

A softer Japanese currency helps exporters as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

The transport equipment sector edged higher 0.7%, with Toyota Motor up 0.8%, while Honda Motor climbed 1.4% and Mazda gained 0.7%.

Global stock markets fell sharply early last month on fears of an imminent recession in the world’ largest economy, but economic data has since buoyed expectations of a soft landing.

Markets remain focused on U.S. labor data though, putting attention this week on the weekly unemployment numbers due on Thursday and August non-farm payrolls due on Friday.

Some market participants are still worried about risks of a possible hard landing, “so unless that is dismissed, it will be difficult for the Nikkei to exceed 39,000 points and keep rising,” said Masayuki Kubota, chief strategist at Rakuten Securities.

Investors will also be monitoring the yen’s direction as well, he added.

Chip-related Advantest rallied 2.3% to give the Nikkei index the biggest lift, followed by electronic components maker TDK, which was up 2.7%.

Uniqlo parent Fast Retailing was up 0.4%.