Nikkei 225 Index Rebounds Second Consecutive Day as Weak Yen Raises Intervention Risk

Akira Ito
26 Jun, 2024
Tokyo

Japan's two popular indexes traded higher for the second consecutive day following the rebound in tech stocks in New York. 

The Nikkei 225 and the Topix indexes closed higher after the rally in tech stocks overshadowed weakness in other sectors. 

Nvidia rebounded more than 6% in overnight trading in New York, supporting the advance in tech stocks in Tokyo. 

The yen's weakness also contributed to the market advance, as weak currency provides an additional boost to market indexes. 

The yen traded at 159.32 against the dollar, approaching a 34-year low and close to the mark that generally prompts intervention from the central bank. 

Currency traders are bracing for the yen to drop to as low as 170 over the next few months, as the Bank of Japan show little urgency in lifting rates. 

On the economic front, investors are looking ahead to the release of industrial output, retail sales, and the jobless rate later in the week. 

 

Japan Stock Movers 

The Nikkei 225 stock average rose 1.4% to 39,719.05, and the Topix index advanced 0.9% to 2,803.19.

Tech stocks were among the leading gainers in Tokyo following the rebound in artificial intelligence-linked stocks in New York. 

Screen Holdings, SoftBank, and Tokyo Electron gained between 3% and 5%. 

Advantest jumped 7.2% to ¥6,222.0, and the company said it is planning to generate annual revenue between 560 billion and 700 billion yen over the next two financial years. 

Toyota Motor and Nissan Motor declined more than 1%, but Honda Motor gained 1.9%. 

The weaker yen supported another advance in exporting companies, and Sony, Panasonic, Mitsubishi Electric, and Canon gained between 0.5% and 1.3%. 

The yield on a 10-year Japanese government bond traded at 1.02% amid uncertain interest rates and the Bank of Japan's reluctance to raise rates in the near term. 

Mitsubishi UFJ, Mizuho Financial Group, and Sumitomo Mitsui advanced between 0.3% and 1.2%.