Japan Indexes Near Multi-Month Highs as Rate Decisions Approach

Akira Ito
12 Dec, 2024
Tokyo

Stock market indexes in Tokyo advanced, tracking gains in New York as investors debated rate outlook in Japan. 

The Nikkei 225 stock average and the broader Topix index gained around 1% amid uncertainty surrounding the Bank of Japan's rate policy. 

Later today, the European Central Bank is widely expected to lower its benchmark lending rates by 25 basis points, and the Federal Reserve is also expected to cut its policy rate by the same. 

However, traders are not sure if the Bank of Japan will raise rates at the end of its policy meeting next week. 

Governor of the Bank of Japan Kazuo Ueda has supported the gradual increase in interest rates following the sustained increase in inflation and other mixed economic signals. 

Sentiment among large export-driven businesses has remained weak amid demand growth slowdown in the U.S. and China, and real household spending has struggled to advance in 2024. 

However, Governor Ueda and other policymakers have favored a gradual increase in rates so as not to destabilize stock and currency markets. 

The Japanese yen weakened to 152.75 against the U.S. dollar, and currency traders are divided about the BoJ's rate actions next week. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 1.2% to 39,849.14, and the broader Topix index gained 0.9% to 2,773.03. 

Retail stocks advanced following the weakening of the yen. 

Fast Retailing Co. Ltd. increased 0.9% to ¥54,470.0, Seven & I Holdings Co. Ltd. decreased 1.6% to ¥2,510.50, Isetan Mitsukoshi Holdings Ltd. gained 1% to ¥2,311.0, and Takashimaya advanced 0.7% to ¥1,250.0. 

Financial stocks were among the most actively traded stocks in Tokyo as the yen resumed its downward slide ahead of the BoJ's rate decisions. 

Sumitomo Mitsui Financial Group decreased 0.1% to ¥3,807.0, Mitsubishi UFJ Financial gained 0.5% to ¥1,851.50, and Mizuho Financial Group advanced 0.2% to ¥3,847.0. 

Osaka Gas Co. Ltd. rose 1.7% to ¥3,268.0, Chubu Electric Power jumped 4.5% to ¥1,624.0, Furukawa Electric advanced 1.6% to ¥6,606.0, and Mitsubishi Electric jumped 2% to ¥2,698.50.