Japan Indexes Extended Weekly Gain to 3%, BoJ Held Rates Steady

Akira Ito
20 Sep, 2024
Tokyo

Benchmark indexes in Tokyo advanced, extending gains from the previous session and following a surge in overnight trading in New York. 

The Nikkei 225 stock average jumped 1.6% and the Topix index gained 1.3% as investors reviewed the latest update on inflation and the Bank of Japan's rate decisions. 

The Bank of Japan kept its short-term rate at 0.25% and left its yield curve unchanged after a policy meeting on Friday and reiterated its hawkish outlook. 

The central bank decided to take a wait-and-see approach after lifting rates twice this year, in March and July. The policy committee said it needs more time to evaluate the impact of its hawkish stand on the economy and financial markets before it decides its next move. 

The policy board also reiterated that the economy is gradually recovering, despite patches of weakness, and private consumption is on an upward trend amid improving corporate profits and rising wages. 

The yen edged 0.5% higher to 142.15 against the U.S. dollar and hovered near 2024's high. 

Japan's overall consumer price inflation rate increased to 3.0% from 2.8% in the previous three months and is increasing to the highest level since October 2023, the Ministry of Internal Affairs and Communications said Friday. 

Core inflation, which excludes volatile food by including energy prices, accelerated for the fourth month in a row to 2.8% after the cost of electricity soared 26.2% following the ending of household subsidies. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average gained 1.6% to 37,773.11, and the broader Topix index added 1.3% to 2,649.57. 

Banks were in focus after the Bank of Japan reiterated its plan to lift rates gradually. 

Mitsubishi UFJ Financial increased 3.2% to ¥1,489.50, Sumitomo Mitsui Financial added 2.7% to ¥9,191.0, and Mizuho Financial advanced 3.1% to ¥2,916.0. 

Vehicle makers advanced following the rise in the yen after the Bank of Japan held rates steady. 

Hino Motors jumped 2.5% to ¥452.40, Toyota Motor advanced 0.7% to ¥2,629.50, Honda Motor gained 1% to ¥1,558.0, and Nissan Motor edged up 1.2% to ¥406.90. 

Tokai Carbon soared 7.2% to ¥932.90, Fanuc gained 3.7% to ¥3,966.0, and Taiyo Yuden added 2.4% to ¥2,913.50. 

Tech stocks were among the leading gainers in Friday's trading, following the surge in New York in overnight trading. 

Tokyo Electron increased 5.4% to ¥24,315.0, Advantest gained 1.2% to ¥6,289.0, Screen Holdings declined 1.5% to ¥9,956.0, and Disco Corp. advanced 2.4% to ¥36,260.0.