TOKYO: Japan’s Nikkei share average edged up on Monday as export-related stocks rose on a weaker yen following stronger-than-expected US jobs data, while a rise in domestic yields boosted financial stocks.
The Nikkei was up 0.49% at 38,872.19 by the midday break, while the broader Topix rose 0.7% to 2,774.37.
The upside surprise in US job growth prompted worries that the Federal Reserve may wait longer to cut interest rates than many investors had hoped.
This had the yen brushing the 157 range against the US dollar again, buoying export-related stocks such as Toyota Motor, up 1.7%, which benefit from a weaker currency.
Meanwhile, the insurance and banking sectors rallied as Japanese government bond yields tracked US Treasury yields higher, which rose after the jobs data.
Of the Nikkei’s 225 constituents, 170 advanced, rising modestly to push the index near 39,000 points ahead of monetary policy decisions this week by the Fed and Bank of Japan.
The Nikkei has struggled to maintain the key level as market participants look for clarity on the global economic outlook.
Foreign investors, whose renewed interest helped drive the index to record highs in late March, have pulled back in recent weeks.
“If you’re a foreign investor, you’ve done very well in the past 18 months. Why carry the risk over the summer?” said Neil Newman, head of strategy at Astris Advisory.
Newman expects Japan’s equities to rally again late in the year after overseas investors have a chance to review risks, including global election outcomes, and assess a broader set of Japanese companies to invest in.
Japan’s Nikkei rises as chip-related shares track US peers higher
Among individual stocks, insurance firm Sompo Holdings climbed 4.6% to become the top percentage gainer, while Dai-ichi Life Holdings rose 3.4%.
Sharp jumped 3.8% after SoftBank Group said on Friday that it plans to construct a large-scale AI data center utilising the telecommunications and electrical equipment manufacturer’s plant.
SoftBank Group was up 1.6%.
In contrast, Cosmetics maker Kao Corp slipped 4.2%.
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