Japan's Nikkei Rebounds Following the Yen's Decline Ahead of Key Economic Updates

Akira Ito
27 Aug, 2024
Tokyo

Market indexes in Tokyo rebounded following a pullback in the yen. 

The Nikkei 225 gained 0.5% and the broader Topix index increased 0.7% in Tuesday's trading and erased losses from the previous session after the yen edged slightly lower. 

Stocks have lacked direction and danced around following the volatility in the yen amid rate path uncertainty and ongoing anxieties about the appropriate level of the currency. 

Investors are hoping the yen will be less volatile in the months ahead if the U.S. Federal Reserve embarks on its rate-cut cycle while the Bank of Japan lifts its rates higher. 

The moves in the opposite direction by two central banks would accelerate the unwinding of the yen carry trade, lowering yen volatility and stabilizing market sentiment. 

 

Japan Stock Movers 

The Nikkei 225 Stocks Average rose 0.5% to 38,288.62, and the Topix index advanced 0.7% to 2,680.80. 

Semiconductor equipment makers were in focus ahead of the release of Nvidia's earnings after the close on Wednesday in New York. 

Tokyo Electron, Advantest, Lasertec, Disco Corp., and Screen Holdings decreased between 0.5% and 4.5%. 

Export-driven stocks closed higher after the yen edged lower but traded in a tight range and stabilized. 

Toyota Motor added 1.8% to ¥2,644.0, Honda Motor gained 1.8% to ¥1,561.0, and Nissan Motor increased 1.7% to ¥430.50. 

Retailers were in focus for the second week in a row as foreign tourists took advantage of the weak yen and drove retail sales higher at department stores and luxury boutiques. 

Isetan Mitsukoshi added 0.5% to ¥2,187.50, Seven & I jumped 4.2% to ¥2,122.0, Fast Retailing Co jumped 0.6% to ¥46,620.0, Aeon Co fell 0.7% to ¥3,743.0, and Nitori Holdings declined 0.2% to ¥22,340.0.