Weak Yen and U.S. Rate Cut Hopes Supported Broad Market Rally In Tokyo

Akira Ito
04 Jul, 2024
Tokyo

Benchmark indexes jumped for the fifth session in a row amid a broad rally supported by the strong advance in overnight trading in New York. 

The Nikkei 225 and the Topix gained nearly 1% on the interest rate, which cut hopes in the U.S. 

The Topix index approached a record high last seen in December 1989. 

Investors took an optimistic view of the latest slew of soft U.S. economic data after private sector payrolls rose less than expected in June and initial unemployment claims rose for the fourth week in a row. 

Moreover, the service sector unexpectedly contracted in June, supporting the case that the Federal Reserve may cut rates as early as September. 

The persistent weakness in the yen also contributed to the market advance as weaker yens boost the profits of export-heavy industries. 

The yen traded at 161.39 against the U.S. dollar, and the yield on Japan's 10-year government bonds stayed above 1% but eased to 1.08%. 

 

Japan Stock Movers 

The Nikkei 225 stock average advanced 0.9% to 40,952.44, and the Topix index gained 0.91% to 2,898.44. 

Kawasaki Heavy Industries dropped 7.9% to ¥5,978.0 after the Ministry of Defense ordered an investigation into allegations that the firm paid bribes to officials for submarine repair contracts. 

Tech stocks were among the leading gainers for the second week in a row. 

Tokyo Electron, Advantest, Screen Holdings, and SoftBank gained between 1.5% and 3.0%. 

Renesas Electronics jumped 3.6% to ¥3,282.0, and Yamaha Motor advanced 5% to ¥1,608.0. 

Mitsui Mining jumped 5% to ¥5,346.0, and Mitsubishi Materials advanced 4% to ¥3,139.0 following the rebound in copper prices in international markets.