Japan’s Nikkei Stock Rises More Than 1％ as Auto Shares Shine on Weak Yen (UPDATE 1)

Reuters

12:29 JST, December 26, 2024 (updated at 17:30 JST)

TOKYO (Reuters) – Japan’s Nikkei share average ended more than 1% higher on Thursday, boosted by Toyota Motor and other auto shares amid a weaker yen.

The Nikkei rose 1.12% to close at 39,568.06. The broader Topix closed up 1.2% to 2,766.78.

Toyota Motor rose 5.99%, jumping for a second session after local media reported the automaker would double its return on equity target to 20% by around 2030.

“Toyota shares boosted the market and the environment is good for automakers as the yen remained weak,” said Takehiko Masuzawa, trading head at Phillip Securities Japan.

The auto sector rose 4.58% to become the top performer among the 33 industry sub-indexes on the Tokyo Stock Exchange (TSE).

Honda Motor rose 3.84% and Nissan Motor jumped 6.58%.

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.

The yen languished near a five-month low on Wednesday, and was last at 157.37 per dollar.

Bank of Japan Governor Kazuo Ueda maintained his dovish stance in his speech on Wednesday, which failed to reverse the course of the local currency.

The yen fell sharply last week as Ueda struck a cautious note after the central bank kept interest rates steady last week.

“Some investors had expected Ueda might say something hawkish on Wednesday to reverse the yen, but he didn’t,” said Masuzawa.

Meanwhile, investors bought stocks of local companies as Thursday is the final day for securing dividend payouts for firms whose books close in December, he said.

Department store operators rose, with J.Front Retailing jumping 8.27% to become the top percentage gainer on the Nikkei. Isetan Mitsukoshi Holdings rose 7.6%.

Of more than 1,600 stocks trading on the TSE’s prime market, 78% rose and 18% fell, with 3% flat.