Japan’s Nikkei Bounces Back on Stronger Energy Stocks, Soft Yen (Update 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

TOKYO (Reuters) – Japan’s Nikkei share average rose on Monday as a jump in oil prices boosted energy-related stocks, while a weaker yen and a strong showing in other Asian equities also buoyed investor sentiment.

The Nikkei closed up 0.77% at 36,026.94, breaking back into the 36,000 range after faltering at the end of last week.

Of the Nikkei’s 225 constituents, 196 advanced while 28 declined.

The broader Topix rose 1.27% to 2529.48.

Energy-related shares led the charge as oil prices jumped after a drone attack on U.S. forces in Jordan added to worries over supply disruption in the Middle East. O/R

Mining shares rose 3.74% to top the Tokyo Stock Exchange’s 33 industry sub-indexes, followed by the oil and coal product shares index, which climbed 3.66%.

In individual stocks, oil and gas producer Inpex Corp gained 4.11% to become the third-largest percentage gainer on the Nikkei.

Meanwhile, a softer yen helped exporters, with Honda Motor and Toyota Motor gaining the most among the top 30 core Topix stocks, up 3.85% and 3.15%, respectively.

Toyota Motor’s gains briefly shrank in the afternoon session, after irregularities were found in certification tests for diesel engines developed by affiliate Toyota Industries, before rebounding.

The yen was last hovering around 147.92 per dollar.

A weak yen raises the value of overseas profits in yen terms when firms repatriate them to Japan.

A Chinese equities-led rally in Asian stocks further boosted sentiment as markets prepare for several big events this week, including the Federal Reserve’s latest monetary policy decision and company earnings.

As earnings season starts, attention will be on individual company performances, which may create some “ups and downs” in the stock market, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“But I don’t think it will change the fundamental rise” of the Nikkei, he said.