Japan’s Nikkei Stock Average Ekes out Small Gain with Tech Stocks’ Help (Update 1)

Reuters

12:45 JST, January 31, 2025 (updated at 17:15 JST, Jan. 31)

TOKYO (Reuters) – Japan’s Nikkei share average closed slightly higher on Friday as technology stocks tracked Wall Street’s overnight gains, while a stronger yen weighed on market sentiment and U.S. tariff worries lingered.

The Nikkei .N225 rose 0.15% to 39,572.49 to post its third straight session of gains. It, however, fell 1% for the week in its fourth weekly drop in five.

The broader Topix .TOPX gained 0.24% to 2,788.66 on Friday.

Chip-making equipment maker Tokyo Electron 8035.T rose 3.33% to provide the biggest boost to the Nikkei.

Fujikura 5803.T, which makes fibers used by data centers and is a gauge for AI-related investments, jumped 4%.

“Gains in Japanese equities were limited as the yen strengthened and the market was also concerned about U.S. President Donald Trump’s tariff policy and its impact on Japanese firms,” said Kentaro Hayashi, a senior strategist at Daiwa Securities.

Trump has said Feb. 1 would be the date that he imposes 25% tariffs on imports from Canada and Mexico.

The yen was on track for its best monthly start to the year since 2018 on Friday, helped by the view that the Bank of Japan (BOJ) is likely to keep raising rates this year while its global peers elsewhere look to ease policy.

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

“Although the market was not totally pessimistic. Investors became selective and bought stocks with a positive outlook and returns,” Hayashi said.

NEC 6701.T surged 18% after the computer maker raised its annual operating profit forecast and announced a 5-for-1 stock split.

Among losers, scandal-hit Fuji Media 4676.T fell 4% after the television network operator slashed its annual net profit forecast by two-thirds citing a sharp drop in advertising revenue.

Truck maker Hino Motors 7205.T tumbled 12% to become the worst percentage loser on the Nikkei.