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Updated December 22nd, 2023 at 08:44 IST

Japan's Nikkei advances following Wall Street rebound

Among the Nikkei's 225 components, 162 experienced gains, 57 declined, and six remained unchanged.

Business Desk
Nikkei
Nikkei | Image:Nikkei
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Japan's Nikkei share average witnessed an increase on Friday, marking a second consecutive weekly gain, in line with the recovery observed on Wall Street overnight. The boost came after US data reinforced indications of a soft landing for the world's largest economy.

As of 02:16 GMT, the Nikkei rose by 0.22 per cent to 33,212.35, positioning itself for a weekly advance of 0.74 per cent. 

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Among the Nikkei's 225 components, 162 experienced gains, 57 declined, and six remained unchanged.

Notably, bank stocks led the upswing among the Tokyo Stock Exchange's industry sectors, registering a 1.88 per cent increase. This recovery followed the Bank of Japan's decision earlier in the week to maintain its yield-suppressing stimulus, providing no indications of an exit timeline.

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The broader financials-centric Topix also saw a gain of 0.45 per cent, with the Topix value share subindex rising by 0.56 per cent, outpacing the growth share subindex's 0.33 per cent increase.

Kazuo Kamitani, a strategist at Nomura Securities, highlighted that the US market's focus on the outlook for a soft landing and a potential rate cut in the second half of the next year was supporting global equities. 

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In Japan, optimism regarding spring wage negotiations, anticipated to bring salary increases surpassing inflation rates, contributed to the positive sentiment. Additionally, hopes for a transition from "bad inflation" to "good inflation" were cited as factors lifting the Nikkei.

Kamitani suggested that, for the time being, the Nikkei is likely to fluctuate between the 25-day moving average at approximately 33,172 and the closing level of 25 days ago at 33,424. 

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The index experienced its most notable decline in two weeks on Thursday, interrupting a two-day rally following a sharp sell-off in US equities.

Furthermore, Japan's core consumer prices exhibited their slowest pace of increase in more than a year, signaling easing cost-push pressures.

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Later in the day, market attention turned to the Federal Reserve's preferred measure of inflation, the PCE deflator.

(With Reuters Inputs)

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Published December 22nd, 2023 at 08:44 IST

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