Japan’s Nikkei climbs a 2nd day, led by tech on Fed rate cut bets

TOKYO: Japan’s Nikkei share average rose for a second straight session on Monday, led by tech shares as the domestic market reacted to optimism for looser monetary policy in the United States.

The Nikkei 225 Index rose 0.7% to 42,922.33 at the midday break.

The broader Topix added 0.3%.

SoftBank Group and Advantest, a maker of chip-testing equipment, were the biggest contributors to the Nikkei’s advance, climbing 2.9% and 1.7%, respectively.

In a closely-watched speech at the Federal Reserve’s annual Jackson Hole symposium on Friday, Fed Chair Jerome Powell opened the door to an interest rate cut next month.

Going in the other direction, Bank of Japan Governor Kazuo Ueda highlighted wage growth that is feeding into conditions for a resumption of interest rate increases.

The divergence in central bank policy led to a surge in the yen, crimping revenue prospects for Japanese exporters. Increasing prospects for a rate cut in the US acted as a tailwind for tech stocks on Wall Street and Japan, said Nomura strategist Fumika Shimizu.

“As a result, Japanese semiconductor-related stocks are also showing strength and leading the market,” Shimizu said.

“There is a possibility that the recent slight upward trend in the yen is weighing on the market.”

There were 133 advancers on the Nikkei index against 90 decliners.

TOTO was the biggest percentage gainer on the Nikkei, surging 7.9% after the luxury toilet maker said on Friday it would open a $224 million plant in the US state of Georgia in a shift away from production in Asia.

Motor maker Nidec was the next biggest gainer, adding 6%.

The biggest loser on the index was Terumo down 3.6% after saying it would spend $1.5 billion to buy Britain-based Organox, a maker of organ preservation technology.