Japan Indexes Close Higher After A Week of Wild Swings

Akira Ito
09 Aug, 2024
Tokyo

Benchmark indexes erased early gains in Tokyo, and investors turned cautious after a week of wild swings. 

The Nikkei 225 stock average decreased 0.3% and the Topix index advanced 0.4% as investors continued to assess the monetary policy outlook in Japan. 

Stock markets gyrated earlier in the week after market indexes plunged 12% and recovered most of the losses the next day, following the Bank of Japan's unexpected increase in key lending rates. 

The rate increase forced hedge funds to unwind risky yen carry trade, setting the market indexes on a roller coaster ride after the yen continued to strengthen to an 8-month high. 

Markets returned to calmness after Deputy Governor of the Bank of Japan Shinichi Uchida assured that the central bank will avoid raising rates when markets are unstable. 

Global markets advanced after better-than-expected U.S. jobless data alleviated worries about the U.S. economic slowdown. 

The yen drifted lower from its 8-month high for the third day in a row and weakened to 147.54 against the U.S. dollar. 

 

Japan Stock Movers 

The Nikkei 225 stock average increased 0.2% to 34,891.90, and the Topix index rose 0.4% to 2,472.73. 

For the week, the Nikkei 225 stock average gained 2.6% and the Topix index advanced 4.8%. 

Advanced chip equipment makers and financial stocks were among the leading gainers in Friday's trading. 

Tokyo Electron, Advantest, Screen Holdings, and Lasertec gained between 1% and 4%. 

Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial advanced between 2% and 4%. 

JGC Holdings increased 7% to 1,208.0 yen after the refinery construction company reported better-than-expected June quarter results due to foreign exchange gains. 

Itochu Corp. gained 6.4% to 6,750.0 yen after the trading company reported better-than-expected results in the June quarter. 

Net profit attributable to shareholders declined 6.6% to 206 billion yen from 213.2 billion yen, and revenue increased 7.5% to 3.6 trillion yen from 3.3 trillion yen. 

The company reiterated its dividend payout ratio plan of 30% or a cash dividend of at least 200 yen per share in the fiscal year 2025 and increased its stock buyback to 150 billion yen.