Japan’s Nikkei Ends Higher Led by Financials, Export Shares (Update 1)

Reuters

12:15 JST, June 10, 2024 (updated at 16:30 JST)

TOKYO, June 10 (Reuters) – Japan’s Nikkei share average closed higher on Monday as export-related stocks gained on a weaker yen following stronger-than-expected U.S. jobs data, while a rise in domestic yields boosted financial stocks.

The Nikkei rallied 0.92% to 39,038.16, its highest closing level since May 23, while the broader Topix rose 1% to 2,782.49.

The upside surprise in U.S. jobs growth prompted worries that the Federal Reserve may wait longer to cut interest rates, spurring a rebound in the dollar.

The dollar traded around 157.07 yen during the session to support export-related stocks including Toyota Motor , up 1.7%, which tend to benefit from a weaker domestic currency.

On the day, insurance and banking stocks rallied, with Dai-ichi Life Holdings gaining 3.6% to lead the pack, as Japanese government bond yields tracked their U.S. Treasury peers higher after the jobs report.

Of the Nikkei’s 225 constituents, 179 advanced ahead of monetary policy decisions this week by the Fed and Bank of Japan.

Still, uncertainties, including global election outcomes and currency stress, could weigh on the market for the time being as investors assess the situation, said Neil Newman, head of strategy at Astris Advisory.

If you’re a foreign investor and you’ve done very well in the past 18 months, why carry the risk over the summer?

The Nikkei has struggled to maintain the 39,000 level in recent months, after retreating from an all-time high of 41,087.75 hit earlier this year. Overseas investors, whose renewed interest in the market helped drive the momentum, have pulled back in recent weeks.

Among individual stocks, heavyweights Fast Retailing and Tokyo Electron rose 1% and 0.9%, respectively.

Sharp Corp jumped 6.3% after SoftBank Group said on Friday it plans to construct a large-scale AI data center utilizing the telecommunications and electrical equipment manufacturer’s plant. SoftBank rose 2.4%.

In contrast, cosmetics maker Kao Corp slipped 4.1%.