Japan Indexes Soared 3%, Producer Price Inflation Accelerated In July

Akira Ito
13 Aug, 2024
Tokyo

Investors bid up stocks after trading resumed following a three-day holiday as market sentiment stabilized after wild swings in the previous week. 

The Nikkei 225 stock average gained 3%, and the Topix index gained 2.6%. 

Market sentiment turned positive after a week of tumultuous trading that saw the Nikkei plunge 12.4%, recording the single-largest point decline, but managed to recover the losses in the following session, in the record point gains. 

Bank of Japan's unexpected rate cut and hawkish rate outlook contributed to the wild swings in markets last week, forcing Deputy Governor of the Bank of Japan Shinichi Uchida to comment that the central bank will refrain from raising rates when markets are unstable, calming market nerves. 

The yen traded at 147.67 against the U.S. dollar and weakened from the eight-month high as investors worried that the Bank of Japan's reluctance to lift rates will continue to keep pressure on the yen. 

Market sentiment was also bolstered after the producer price index increased 3% in July, the Bank of Japan reported Tuesday. 

Producer prices increased after energy costs rose, driven by the ending of government subsidies. 

Producer prices accelerated for the sixth month in a row and increased to 3% for the first time since August 2023, after the yen-denominated costs of imported goods and materials soared 10.8%. 

Producer price inflation in June was 2.9%. 

Weaker yen has contributed to higher prices for imported food, fuel, and materials, but the recent rebound in the yen may slow inflation in the months ahead. 

 

Japan Stock Movers 

The Nikkei 225 stock average jumped 3% to 36,096.44, and the Topix index advanced 2.6% to 2,546.76. 

Tech stocks were among the leading gainers Tuesday's trading following the rebound in artificial intelligence-linked stocks in New York. 

Tokyo Electron gained 6.3% to ¥27,430.0, Advantest Corp. jumped 7.3% to ¥6,217.0, and Screen Holdings increased 7.3% to ¥10,390.0. 

Rakuten Group advanced 8.8% to ¥847.90, and Trend Micro jumped 5.4% to ¥8157.0. 

Mitsubishi UFJ Financial increased 1.7% to ¥1,435.0, Sumitomo Mitsui advanced 3.6% to ¥9,296.0, and Mizuho Financial gained 2.7% to ¥2,855.0. 

Sharp Corp. declined 5.7% to ¥817.60 and Nippon Express declined 2.5% to ¥6,717.0. 

Meiji Holdings dropped 5.2% to ¥3,452.0, and the company reported better-than-expected June quarter revenue of 279 billion yen and earnings per share of 50.23 yen.