Japan’s Nikkei Stock Average Rallies on Wall Street Gains, Softer Yen (Update 2)

Reuters

12:23 JST, September 12, 2024 (updated at 15:30 JST)

TOKYO (Reuters) – Japan’s Nikkei share average rose on Thursday after a seven-day slide, as Wall Street’s overnight gains and a weaker yen buoyed investor sentiment.

The Nikkei index closed 3.4% higher at 36,833.27 in broad-based buying. The broader Topix finished up 2.4% at 2,592.5.

The yen softened after hitting its highest against the dollar this year in the previous session.

“Due to the impact of the (U.S.) consumer price index report, we are seeing the yen trend weaker. This seems to be contributing to positive movements in Japanese stocks,” said Hiroshi Namioka, chief strategist at T&D Asset Management.

In a boost to the dollar, Wednesday’s CPI report indicated some stickiness in inflation, crushing bets that the Federal Reserve would cut interest rates by 50 basis points next week.

Shares of exporters, which tend to benefit from a weaker domestic currency, rebounded.

Among the Tokyo Stock Exchange’s 33 industry groupings, transport equipment, which includes automakers, climbed 2.4% and was among the top performers. Toyota Motor gained 3.8%, while Kawasaki Heavy Industriesled the sector with a 6.3% rise.

Japan’s technology shares tracked their U.S. peers higher to offer the Nikkei the largest lift.

All three major U.S. stock indexes closed higher on Wednesday, helped by gains in the technology sector. The Philadelphia SE Semiconductor Index surged, with AI chipmaker Nvidia adding 8%.

Chip-making equipment giant Tokyo Electron jumped 4.8%, while Advantest, which counts Nvidia among its customers, was up 9.2%. AI-focused startup investor SoftBank Group rose about 8%.

Other major shares also rose, with Uniqlo parent Fast Retailing climbing 3.8% to give the Nikkei the biggest boost.

Shares of Seven & i Holdings rose more than 4% after Bloomberg News reported that Canada’s Alimentation Couche-Tard was discussing how much it could raise the offer price to buy the firm.

Of the Nikkei’s 225 constituents, 222 rose, while 3 fell.