Japan Stock Indexes Jumped 2% Following U.S. Rate Cut

Akira Ito
19 Sep, 2024
Tokyo

Stock market indexes in Tokyo soared following the jumbo rate cut by the U.S. Federal Reserve, and the yen weakened.

The Nikkei 225 stock average and the Topix index jumped nearly 2.5% after the latest Federal Reserve policy decision. 

The Federal Reserve lowered its key lending rate range by 50 basis points to between 4.75% and 5.0%, its first rate cut since March 20220.

In addition, the central bank also signaled additional rate cuts totaling as much as 50 basis points over the next two meetings this year. 

But Fed Chair Jerome Powell stressed that this is not the beginning of a series of 50 basis point rate cuts. 

While the larger rate cut was welcomed by investors, the move also raised concerns about the health of the U.S. economy and labor market conditions. 

The super-sized rate cut lifted markets in Asia, and the Japanese yen weakened to 142.77 and the Chinese yuan gained 0.3% to 7.07 against the U.S. dollar. 

The euro and the British pound gained 0.1% in trading to $1.12 and $1.32 following the Fed's move. 

The Nikkei 225 stock average jumped as much as 2%, the CSI 300 index added 0.8%, the Hang Seng index advanced 1.6%, and the ASX 200 index inched higher by 0.3%. 

Export-driven stocks were among the leading gainers in Tokyo's trading; investors shifted their attention to the Bank of Japan's rate decisions on Friday. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 2.4% to 37,260.42, and the Topix index added 2.3% to 2,624.53. 

Toyota Motor jumped 5.4% to ¥2,618.50, Honda Motor advanced 4.1% to ¥1,555.0, and Nissan Motor edged higher 3.8% to ¥404.40. 

Among major exporters, Sony Group gained 2.4% to ¥13,170.0, Canon advanced 1.8% to ¥4,753.0, and Panasonic increased 3.3% to ¥1,251.0. 

Seven & I Holdings edged up 0.7% to ¥2,166.0, Isetan Mitsukoshi increased 2.1% to ¥2,169.0, Fast Retailing advanced 2.8% to ¥46,070.0, and Aeon Corp. gained 1% to ¥4,057.0. 

Trading companies, also known as Sogo Shosha, also participated in Thursday's market rally. 

Mitsui & Co. Ltd. jumped 3.6% to ¥2,933.0, Marubeni Corp. advanced 2.7% to ¥2,273.0, Mitsubishi Corp. increased 2.8% to ¥2,878.50, and Itochu shot up 4.4% to ¥7,655.0.