Japan’s Nikkei Stock Average Snaps 3-day Slide as Automakers and Banks Gain (Update 1)

Reuters

12:22 JST, November 15, 2024 (updated at 17:25 JST)

TOKYO (Reuters) – Japan’s Nikkei share average snapped a three-session slide on Friday, as a weaker yen lifted automakers and financials gained after three major banks upgraded their annual profit forecasts.

The Nikkei .N225 closed 0.28% higher at 38,642.91, but lost 2.4% for the week. It rose to a session high of 39,101.64 before paring gains on profit-booking.

The broader Topix .TOPX ended 0.39% higher at 2,711.64, but posted a 1.49% weekly loss.

“The yen’s weakness has lifted Japanese shares,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.

“Gains in European shares and Wall Street’s weak finish overnight suggest that funds that were flown into the U.S. excessively in Trump trades are now being reallocated to other regions.”

Wall Street’s main indexes closed lower on Thursday after Federal Reserve Chair Jerome Powell dampened investor hopes for another rate cut this year by saying the U.S. central bank need not rush to ease monetary policy. .N

The yen JPY=EBS fell to 156.76 per dollar, its lowest since July 23, nearing a territory that had triggered intervention from Japanese authorities in the past. FRX/

A weaker Japanese currency tends to boost shares of exporters, as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

Japan’s three major banks climbed after they raised their annual profit forecasts to record highs on Thursday, fueled by robust lending demand and higher margins following an interest rate hike by the Bank of Japan in July.

Mizuho Financial Group 8411.T jumped 6.63%. Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T rose 1.45% and 0.58%, respectively.

Toyota Motor 7203.T gained 1.43% and Honda Motor 7267.T rose 2.19%.

Nissan Motor 7201.T climbed 4.46% after a report that activist investor Oasis Management had taken a stake in the automaker.