Japan’s Nikkei Gains for Second Straight Week as Banks, Shippers Climb

Reuters

16:42 JST, December 22, 2023

TOKYO, Dec 22 (Reuters) – Japan’s Nikkei share average booked a second weekly advance, helped by an overnight Wall Street rebound after U.S. data offered more evidence of a “soft landing” in the world’s largest economy.

The Nikkei finished 0.09% higher at 33,169.05 on Friday, registering a 0.6% rise for the week.

The index had climbed 0.71% earlier in the day as chip shares tracked a rally in their U.S. peers, but those gains quickly evaporated.

Tokyo Electron, which had risen as much as 2%, ended 0.83% higher, while Advantest swung from a 1.9% jump to close down 1.07%.

Bank stocks, however, built on gains through the day as they recovered from losses brought on by the Bank of Japan’s decision to keep yield-suppressing stimulus in place while offering no hints on the timing of an exit.

The Tokyo Stock Exchange’s banking index rallied 2.44% to put it second among the 33 industry groups. Shipping was the top performer, jumping 3.26% in the aftermath of the Red Sea attacks.

The broader Topix, with its lower concentration of tech shares, gained 0.45%. Its value share subindex added 0.66%, outpacing the growth share subindex’s 0.24% rise.

Nomura Securities strategist Kazuo Kamitani said an optimistic domestic macroeconomic backdrop was also supporting shares.

Hopes for spring wage negotations to bring salary increases that outpace inflation, and for a shift to – put simply – good inflation from bad inflation, is lifting the Nikkei, he said.

Japan’s core consumer prices rose at their slowest pace in more than a year in a sign of easing cost-push pressures, data showed.

The Federal Reserve’s preferred measure of inflation, the PCE index, is due later in the day.

Japan’s equity markets, unlike most of the world, will be open on Monday to react to the U.S. data.