TOKYO: Japanese shares rose on Thursday, rebounding from declines in the previous session, with investors scooping up value stocks in anticipation that higher interest rates would dent growth stocks.
The Nikkei was up 0.5% at 38,392.1 by the midday break, while the broader Topix was up 0.76% at 2727.05.
The Bank of Japan board members turned overwhelmingly hawkish at their April policy meeting, with many calling for the need to raise rates steadily, a summary of opinions at the meeting showed.
“The summary was more hawkish than the Governor (Kazuo) Ueda sounded after the policy meeting last month,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
“That raised speculation that the BOJ will raise interest rates earlier than the market expected.”
Some members saw the chance of a faster-than-expected pace of rate hikes on heightening prospects of inflation durably staying, or even exceeding, the BOJ’s 2% target, the summary showed.
Japan’s 10-year bond yield rose to 0.91%, its highest level since April 26.
Topix’s value share index rose 0.79%, outperforming the growth stocks index, which rose 0.73%.
Higher yields could hurt growth stocks, such as chip-related and other technology companies whose appeal lies in future cash flows.
Japan’s Nikkei loses stream as market awaits fresh catalyst
Chip-making equipment maker Tokyo Electron fell 1.16% to weigh the most on the Nikkei.
Healthcare equipment maker Omron surged 11.69% to become the biggest boost for the Nikkei after its forecast for the annual operating profit beat market expectations.
Financial group Orix surged 8.22% after the company announced a share buyback.
Technology investor SoftBank Group fell 1.51 after Arm Holdings fell about 7% in extended US trading after the AI chipmaker’s full-year revenue forecast disappointed investors.
SoftBank Group owns about 90% of Arm.
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