Japan’s Nikkei Bounces Off One-Month Low on Soft Yen, Wall Street Rally

Reuters

12:37 JST, December 11, 2023

TOKYO (Reuters) – Japan’s Nikkei share average rebounded on Monday 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 U.S. economy.

The Nikkei was up 1.6% at 32,817.61, as of the midday recess, in a broad rally that saw 201 of the benchmark’s 225 components rise versus 24 decliners.

The broader Topix rose 1.38%.

Gains in the Nikkei came after the index’s worst weekly performance since mid-September last week, which included a 3.4% slide over 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.”

The yen weakened to 145.47 per dollar JPY=EBS on Monday, from as strong as 141.60 late last week.

U.S. stocks – and particularly high tech shares – had rallied on Friday after robust monthly jobs data bolstered speculation the economy would avoid a recession.

Heavyweight chip-making equipment manufacturer Tokyo Electron was the Nikkei’s biggest support, adding 76 points with a 3.42% jump. Chip-testing machinery maker Advantest gained 2.44%.

Exporters rose, with Toyota Motor and Nissan adding 0.93% and 3.1%, respectively. Shares of Sony climbed 1.8% and Nintendo rose 1.5%.

Energy shares outperformed following a rebound in crude oil prices, with a Tokyo Stock Exchange sub-index of the stocks gaining 2.28%. The outlook for higher fuel costs sank airlines, with the sub-index slipping 0.28%.

The biggest gainer among the 33 TSE industry groups was the electric and gas utilities sub-index, which rallied 4.1%, led by a 12.61% surge in Tokyo Electric Power Co. Shares of the power generator continued their multi-day climb to an eight-year peak amid hopes for an early restart of the Kashiwazaki-Kariwa nuclear power plant, the world’s largest.