Japan Indexes Extend Winning Streak to Third Day After Yen Dropped to Five-Week Low

Akira Ito
07 Oct, 2024
Tokyo

Stock market indexes in Tokyo extended their winning streak for the third session in a row after the yen weakened sharply.

The Nikkei 225 stock average and the Topix index advanced more than 2% in Monday's trading after the yen dropped to a five-week low. 

The yen traded at 148.45 against the U.S. dollar after the U.S. economy added jobs at the fastest pace in six months in September, easing pressure on the Bank of Japan to raise rates in the immediate future.

Investors are also anticipating that the Bank of Japan policymakers will hold rates steady on October 31, after the newly appointed prime minister Shigeru Ishiba made a U-turn and supported a gradual increase in interest rates. 

Earlier, Ishibara had supported hawkish monetary policy and aggressive rate hikes before assuming the leadership position. 

Investors reviewed the retail sales and industrial production data released last week and reassessed the rate path outlook amid the rising prospects that the U.S. Federal Reserve is likely to achieve the so-called soft landing, where policymakers manage to cool inflation while keeping the economic growth intact. 

Last week the government said Japan's annual retail sales growth slightly accelerated to 2.8% in August from 2.7% in July.

Retail sales increased for the 29th month in a row, supported by the increase in wages, which continue to support higher consumption of basic items. 

Japan’s industrial production declined in August, and manufacturing extended contraction in September, but the sentiment among large manufacturers was steady in the third quarter.

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 2.3% to 39,530.29, and the broader Topix index advanced 2.1% to 2,751.12. 

Retail stocks were in focus ahead of the start of the earnings season this week. 

Aeon Corp. declined 0.5% to¥3,960.0, Fast Retailing gained 3.3% to¥50,850.0, Isetan Mitsukoshi Holdings added 7.8% to¥2,489.50, and Seven & I jumped 2% to¥2,238.50. 

Mitsubishi UFJ Financial added 3.9% to ¥1,537.50, Sumitomo Mitsui Financial increased 4% to ¥3,215.0, and Mizuho Financial Group gained 4.6% to ¥3,108.0. 

Vehicle makers advanced despite the growing anxieties about Chinese electric vehicle makers making inroads in global markets. 

Toyota Motor Corp. advanced 2.6% to ¥2,654.50, Honda Motor Corp. jumped 2.7% to ¥1,606.0, and Nissan Motor gained 1.7% to ¥421.30.