Japan’s Nikkei Stock Rises on Weaker Yen, China’s Surprise Policy Shift (UPDATE 1)

Reuters

12:17 JST, December 10, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average advanced on Tuesday as a softer yen lifted exporter shares, while stocks with a connection to China soared on Beijing’s new promises of an “appropriately loose” monetary policy next year.

The Nikkei closed up 0.5% at 39,367.58, while the broader Topix rose 0.3% to 2,741.41.

Automakers were among exporter shares that climbed as the yen softened against the U.S$..

The dollar was trading around ¥151.055 during the afternoon session.

Toyota Motor advanced 1.3%, Suzuki Motor soared 2.7% and Honda Motor added 1.1%.

Fanuc and Yaskawa Electric, up 3.1% and 2.7% respectively, and other shares with strong ties to China rallied, after Beijing’s surprise announcement on Monday that it plans to implement a looser monetary policy and more proactive fiscal policy.

Chip-testing equipment maker Advantest was among a portion of Japan’s chip-related shares that tracked AI leader Nvidia and other U.S. technology shares lower after China’s market regulator launched a probe into Nvidia, but recovered in afternoon trade.

The stock climbed 0.9%.

However, the Nikkei’s rise was limited as investors cautiously awaited the Federal Open Market Committee (FOMC) and Bank of Japan (BOJ) monetary policy meetings next week.

“A cut from the Federal Reserve is baked-in, but there’s uncertainty about what the BOJ does. So if the latter hikes, a stronger yen will hurt Japanese stocks,” said Kyle Rodda, senior financial market analyst at Capital.com.

Somewhat more hawkish guidance from the Fed regarding next year’s policy outlook could counterbalance the impact on the dollar-yen pair, Rodda added.

U.S. CPI data and the BOJ’s “tankan” survey are due later this week.

Among other major stocks, chip equipment maker Tokyo Electron added 3.5%, entertainment conglomerate Sony Group rallied 4.1% and Uniqlo-owner Fast Retailing edged up 0.2%.