Japan Indexes Extended 2-day Gains, Yen Weakened Again Following BoJ Comments

Akira Ito
07 Aug, 2024
Tokyo

Stock market indexes rebounded in Tokyo for the second day in a row, but market participants were worried about the outlook for the yen in the near future. 

The Nikkei 225 stock average jumped more than 1%, and the broader Topix advanced more than 2%. 

Global markets rebounded after calm returned to financial markets, following steep losses over the last five trading sessions as investors worried about the weakening U.S. economic conditions and the unexpected increase in interest rates by the Bank of Japan. 

The Bank of Japan's policy tightening led to a swift unwinding of the yen carry trade, stoking a surge in market volatility not seen since 1987. 

The yen eased to 146.90 against the U.S. dollar after Bank of Japan Deputy Governor Shinichi Uchida said the central bank will not raise rates if the market is unstable. 

Those comments contributed to positive market sentiment and supported the market advance in Thursday's trading.

However, investors worry that the pressure on the yen is likely to remain high, as the wide yield gap between the U.S. and Japan is likely to persist. 

 

Japan Stock Movers 

The Nikkei 225 stock average jumped 1.3% to 35,124.54, and the Topix index advanced 2.2% to 2,489.38. 

Financial services providers led the market gainers in Thursday's trading. 

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial advanced between 8% and 10%. 

Leading industrial exporters led the gainers, and Canon jumped 9.9% to ¥4,405.0, Mitsubishi Electric advanced 3% to ¥2,160.50, and SoftBank Group jumped 6.5% to ¥7,544.0. 

Nichirei jumped 7.6% to ¥3,970.0, Nichias advanced 13.1% to ¥5,230.0, and Fujikura increased 8.3% to ¥2,650.0. 

Daikin Industries dropped 9.5% to ¥17,200.0 after the world's largest air conditioner manufacturer reported weaker-than-expected results. 

Net sales in the June quarter increased 14% to 1.25 trillion yen, and net income fell 21% to 63.10 billion yen from a year ago. 

The company estimated fiscal year revenue of 4.54 trillion yen, net income of 2.67 billion yen, and dividends of 320 yen.