Japan’s Nikkei Ends Sharply Higher but China Ban Weighs on Tourism Stocks
16:21 JST, August 28, 2023
TOKYO, Aug 28 (Reuters) – Japan’s Nikkei share average on Monday posted its sharpest daily gains in two months as investors bought back stocks after losses at the end of last week, but tourism-related shares fell amid worries about the impact of a ban on the country’s seafood by China.
The Nikkei .N225 jumped 1.73% to close at 32,169.99 in its biggest daily rise since June 28. The broader Topix .TOPX climbed 1.47% to 2,299.81.
“Short-term investors bought back stocks after the sharp declines on Friday. Gains on Wall Street in the previous session also underpinned sentiment,” said Takehiko Masuzawa, trading head, Phillip Securities Japan.
U.S. stocks ended higher on Friday as investors digested Federal Reserve Chair Jerome Powell’s comments that the Fed might need to raise interest rates further to ensure inflation was contained.
Uniqlo-owner Fast Retailing 9983.T rose 1.6% to become the biggest boost on the Nikkei. Air-conditioning maker Daikin Industries 6367.T jumped 4.19%.
Toyota Motor 7203.T gained 1.73% to boost the Topix index the most.
Tourism-related shares fell amid worries over a possible decline in spending by Chinese tourists on Japanese goods and services, triggered by China’s blanket ban on all seafood imports from Japan.
China announced the move after Japan released treated radioactive water from a wrecked nuclear power plant into the Pacific Ocean.
“China’s ban (on Japanese seafood imports) could become a big drag on the Japanese stocks, depending on how big the issue could become,” Masuzawa said.
The move followed a recent return of Chinese group tours, which raised expectations for boosting their consumption in Japan.
Department store operator J.Front Retailing 3086.T fell 4.18% to become the worst performer on the Nikkei.
Peers Isetan Mitsukoshi Holdings 3099.T lost 3.03% and Takashimaya 8233.T slipped 3.15%.
Cosmetics maker Shiseido 4911.T lost 2.55%.
All but two sub-indexes on the Tokyo Stock Exchange rose. The airline sector .IAIRL.T lost 1.31% and the retailers’ index .IRETL.T inched down 0.13%.
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