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Updated January 18th, 2024 at 09:02 IST

Weaker Yen drives up Japan's Nikkei with exporters leading gains

The broader Topix index also experienced a 0.23 per cent uptick, closing at 2,502.13.

Business Desk
Nikkei
Nikkei | Image:Shutterstock
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Japan's Nikkei trades higher: The Nikkei share average in Japan reversed its early decline and traded higher on Thursday, fuelled by a weaker Yen that enticed investors to engage in purchasing activities, particularly in stocks of exporters such as Toyota Motor. 

By midday close, the Nikkei had gained 0.45 per cent, reaching 35,637.01, after initially opening 0.3 per cent lower. 

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The broader Topix index also experienced a 0.23 per cent uptick, closing at 2,502.13.

Shuji Hosoi, senior strategist at Daiwa Securities, noted that investors welcomed the depreciation of the Yen, attributing the day's gains to foreign investors who actively acquired significant stocks. 

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Toyota Motor emerged as the top gainer on the Nikkei, climbing 3.64 per cent, while the automotive sector as a whole saw a 2.96 per cent surge, leading among the 33 industry sub-indexes on the Tokyo Stock Exchange.

Tyre manufacturers also enjoyed gains, with Bridgestone and Toyo Tire rising by 3.15 per cent and 4.35 per cent, respectively. 

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The dollar's proximity to a one-month peak against major currencies further supported the market, as robust US retail sales data fueled expectations that the Federal Reserve would not hastily lower interest rates. 

A weaker Yen is particularly advantageous for exporters, as it enhances the value of overseas profits when repatriated to Japan.

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Advantest, a chip-testing equipment maker, took the lead in boosting the Nikkei with a 2.98 per cent rise, while Tokyo Electron, a chip-making equipment manufacturer, gained 1.14 per cent. 

Fast Retailing, the owner of Uniqlo, experienced a 0.9 per cent increase. Despite these positive movements, strategists noted investor caution regarding sharp increases in the benchmark index, limiting further gains in the current session.

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The Nikkei had already surged 8 per cent since the beginning of the year, reaching its highest level since February 1990 in the previous session, where it ended 0.4 per cent lower. 

On the downside, video game maker Nexon witnessed a 4.9 per cent decline, marking it as the worst performer on the Nikkei, while marketplace site operator Mercari fell by 3.44 per cent. 

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Among the 225 Nikkei components, 120 registered gains, 101 incurred losses, and four remained unchanged.

(With Reuters Inputs)

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Published January 18th, 2024 at 09:02 IST

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