Global Investors Brace for Volatile Yen Amid BoJ's Reluctance to Lift Rates

Akira Ito
12 Aug, 2024
Tokyo

Benchmark indexes in Japan rebounded in Friday's trading as market sentiment stabilized after a week of wild swings, sharp declines, and rebounds. 

Financial markets are closed on Monday to celebrate the Mountain Day holiday. 

In Friday's trading, the Nikkei 225 stock average gained 0.6% and the Topix index jumped close to 1% as investors reassessed the future rate path and its implications for the yen. 

The yen traded at 147.23 against the U.S. dollar after the Bank of Japan's unexpected rate increase lifted the currency to an eight-month high last week. 

Despite the two-day rebound in stock market indexes, investors are expecting the yen to resume its slide toward the 160 level because of the yawning gap between Japan and U.S. government bond yields. 

Moreover, corporate earnings have been in focus as investors look forward to the release of quarterly results from leading industrial and financial companies later this week. 

On the economic front, investors are looking ahead to the release of Japan’s second quarter GDP to show a slight pick-up from the first quarter, driven by an increase in exports and higher domestic demand for industrial goods. 

 

Japan Stock Movers 

The Nikkei 225 stock average increased 0.6% to 35,025.0, and the Topix index gained 0.9% to 2,483.30. 

Technology and chip-related stocks led the gainers in Monday's trading as investors returned to increase exposure to advanced semiconductor equipment makers. 

Advantest, Screen Holdings, and Lasertec fell between 0.5% and 0.9%, but Tokyo Electron advanced 0.7%. 

Toyota Motor and Nissan Motor declined 0.5%, and Honda Motor advanced 0.3% in muted trading on Friday.