Japan’s Nikkei crosses 29,000 as yen weakens on BoJ’s dovish stance

TOKYO: Japan’s Nikkei share average hit a more than eight-month high on Monday, topping the key psychological 29,000 level after the Bank of Japan’s (BOJ) continued dovish stance pushed the yen to a nearly two-month low.

Rail stocks and airlines were the best performing of the Tokyo Stock Exchange’s 33 industry sectors on the potential boon for tourism, each gaining close to 2%. Automakers rose more than 1% amid a boost to the value of overseas sales. Tech services provider NEC surged more than 14% after strong earnings to lead Nikkei gains by a wide margin.

The Nikkei gained 0.92% to end at 29,123.18, after rising as high as 29,145.89 earlier, a level last seen on Aug. 19. The broader Topix added 1% to 2,078.06, ending near the day’s peak of 2,078.37, its highest since September 2021.

The yen weakened to the cusp of 137 per dollar in Tokyo, extending its decline from Friday, when the BOJ kept stimulus settings unchanged and signaled it was in no hurry to normalize policy. Japan has a shortened trading week, marking the ‘Golden Week’ holiday from Wednesday, when the US Federal Reserve sets policy, followed by the European Central Bank on Thursday.

“I’m a bit surprised” that Japanese stocks would rise so much ahead of those risk events, said Kenji Abe, a strategist at Daiwa Securities. “The strong performance is partly because of yen weakness due to the BOJ’s dovish stance, but also Japanese investors have some expectations that investors in the US are becoming less risk averse, and there might be some foreign inflows into Japanese stocks.”