Tech Stocks Drive a Rebound In Japan Indexes, Yen Faces Persistent Downward Pressure

Akira Ito
18 Jun, 2024
Tokyo

Market indexes in Tokyo rebounded and erased most of the losses in the previous session following a rebound in tech stocks in overnight trading in New York. 

The Nikkei 225 and the Topix indexes jumped more than 0.4% in Tuesday's trading after tech stocks led the gainers in Tokyo. 

Mega-cap tech stocks in New York traded higher, lifting the S&P 500 index and the Nasdaq Composite to new highs despite Treasury yields rebounding in Monday's trading. 

The yen edged stabilized at 157.56 against the U.S. dollar after weakening in Friday's trading after the Bank of Japan held its interest rate steady and showed little urgency in tapering government bond purchases. 

Governor of the Bank of Japan, Kazuo Ueda, told lawmakers today that the central bank is prepared to raise rates after the next policy meeting in July if future economic data support the move. 

Ueda also stressed that a weak yen could increase operating costs for businesses and dampen consumer purchases, but higher wages could also support consumer sentiment and revive retail sales. 

The yen has been under pressure and trading near a three-decade low after the Bank of Japan has shown little interest in raising rates or lowering government bond purchases, and the wide and persistent yield gap between the U.S. and Japan has also negatively impacted the currency. 

The yen is expected to depreciate further over the next six months, as the finance ministry and the Bank of Japan prefer a steady and slow depreciation of the currency and avoid expensive market interventions.

 

Japan Stock Movers 

The Nikkei 225 stock average rose 0.7% to 38,388.05, and the Topix index advanced 0.4% to 2,710.20. 

Takeda Pharmaceuticals declined 3% to ¥4,043.0 after a seizure drug failed in late-stage trials. 

Rakuten Group jumped 4.5% to ¥824.0 after the company reached a settlement with IBM for a patent dispute. 

TDK Corp. soared 6.9% to ¥9,428.0 after the electronic component and data-storage media maker said that the latest improvement in battery technology will enhance battery life for wearable devices. 

Nintendo, Murata, Nexon, Mitsubishi Heavy Industries, Konami Group, and Murata advanced more than 3%. 

Mercari Inc. declined 2.5% to ¥2,034.50, and Sony and Mitsubishi Electric declined around 0.3%.