Japan’s Topix Reaches 34-year Peak as Financials Gain, Tech Rebounds (Update 1)

Reuters

12:37 JST, June 28, 2024

TOKYO, June 28 (Reuters) – Japan’s Topix stock index climbed to a 34-year high on Friday, as banks gained amid a gradual rise in domestic bond yields and technology shares rebounded from a sell-off in the previous day.

The Topix ended the day up 0.57% at 2,809.63, having earlier hit its highest since the country’s asset bubble burst in January 1990 at 2,821.86.

A sub-index of value shares jumped 0.9%, outpacing a 0.22% gain for growth shares.

The more tech-heavy Nikkei rallied 0.61% to 29,583.08, recouping most of Thursday’s 0.82% slide.

Of the Nikkei’s 225 components, 148 rose versus 76 that fell, with one flat.

The release of a closely watched U.S. inflation indicator later in the day and crucial French elections this weekend, however, gave investors reasons to be cautious, said Maki Sawada, an equity strategist at Nomura Securities.

With events like those coming up, it’s very hard to chase the Nikkei higher, she said.

The top performing sectors on the Tokyo Stock Exchange were insurance and banking, up 2.71% and 2.44% respectively.

Benchmark 10-year Japanese government bond yields retreated 1 basis point to 1.06%, but remained set for a 9-bp rise this week. The yields had reached 1.08% on Thursday, the highest level this month.

The yen’s slide to the weakest level in 38 years against the dollar and heated Tokyo consumer price data bolstered bets for another rate hike at the Bank of Japan’s July policy meeting.

Shares linked to chips and artificial intelligence (AI) were big winners on the Nikkei.

AI-focused startup investor SoftBank Group rallied 2.52% to be the biggest points gainer on the index.

Chip-testing equipment maker Advantest and peer Lastertec were next, advancing 3% and 3.2% respectively.