Japan’s Nikkei Stock Average Ends Higher on Wall Street’s Strength; Pares Gains on Profit Taking (Update 1)

Reuters

14:11 JST, October 10, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average ended higher on Thursday, tracking a strong finish on Wall Street overnight, although it pared gains as investors took profits ahead of the September U.S. inflation data.

The Nikkei closed up 0.26% at 39,380.89, after climbing as much as 0.86% earlier in the session.

The broader Topix closed up 0.2% at 2,712.67.

Wall Street stocks advanced on Wednesday with the S&P 500 and the Dow scoring record closing highs after the release of the Federal Reserve’s meeting minutes and ahead of September inflation data and the earnings season.

The environment for the Nikkei was good, with the Dow and the S&P closing at a record high and the semiconductor index rising, said Takehiko Masuzawa, trading head of Phillip Securities Japan.

“But the gains narrowed because investors sold stocks to book profits.”

The market stayed away from active trade ahead of the U.S. Consumer Price Index report due later in the day, which investors will use to gauge the Federal Reserve’s rate-cut path.

Since a blowout U.S. employment report last week, bets of a large 50 basis points cut in November have been completely priced out, with 85% of bets now on a 25 bps cut.

Technology investor SoftBank Group rose 3.97% to give the biggest boost to the Nikkei. Uniqlo brand owner Fast Retailing gained 1.28%.

Camera maker Nikon rose 5.55% to become the Nikkei’s top percentage gainer.

Lion Corp jumped 6.95% after a report that Japan Activation Capital, an investment fund established by a former Carlyle executive in Japan, has invested in the consumer goods maker.

On the flip side, supermarket chain Aeon tanked 8.66%, weighing on the Nikkei the most, after it posted a 76.5% decline in its half-year net profit through August.

It was also the biggest percentage loser among the 225 Nikkei components.

Of the Nikkei stocks, 149 rose and 74 fell, with two flat.