Japan's Nikkei bounces on PM Ishiba's dovish rate comments, weaker yen
Updates with prices as of 0230 GMT
By Brigid Riley
TOKYO, Oct 3 (Reuters) -Japan's Nikkei share average rebounded on Thursday, buoyed by a softer yen as Prime Minister Shigeru Ishiba's dovish comments reduced bets of further tightening in monetary policy.
The Nikkei .N225 had risen 2.2% to 38,655.03 by the midday break, while the broader Topix .TOPX was up 1.4% at 2,690.18.
Ishiba said Japan is not in an environment for an additional rate increase, in an apparent effort to shake off his reputation as a monetary hawk, after a meeting with Bank of Japan Governor Kazuo Ueda on Wednesday.
The yen hovered around 146.95 per dollar on Thursday. It had scaled a high of 141.65 on Monday, as markets digested Ishiba's win in the ruling Liberal Democratic Party's leadership election on Friday.
The yen and Japanese stocks typically move in opposite directions, since a stronger domestic currency hurts exporters' competitiveness when repatriating revenue.
The Nikkei's gains slowed somewhat as the index neared the psychologically significant 39,000 level.
There's a growing focus on how the new administration's economic policies will shape up, said Maki Sawada, an equities strategist at Nomura Securities.
"With those factors somewhat uncertain, it could temporarily weigh on the stock market," although a weaker yen looks poised to support the market on Thursday, she said.
Ishiba had previously said he would beef up taxation on investment income and that there was room for corporate tax hikes. He has however begun to back-pedal on his focus on fiscal discipline.
Export-related shares gained on the back of a softer yen. Sony Group 6758.T rose 1.5% and automaker Toyota Motor 7203.T gained 2.1%.
Big technology shares tracked their U.S. peers higher and added to the Nikkei's rally. .N
Chip-related shares Tokyo Electron 8035.T and Advantest 6857.T climbed 3.3% and 4.1%, respectively, while AI-focused startup investor SoftBank Group 9984.T rallied nearly 3%.
Nikkei heavyweight Fast Retailing 9983.T surged 3.5%, after the Uniqlo parent said domestic store sales rose in September.
Reporting by Brigid Riley; Editing by Rashmi Aich and Subhranshu Sahu
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
