TOKYO: Japan’s Nikkei share average edged up on Monday, tracking Wall Street higher even as concerns about the Bank of Japan (BOJ) tightening its monetary policy weighed on sentiment.
After slumping at the end of the week, the benchmark index received a boost from US stocks, which rose overnight on Friday on news of an improving consumer outlook on inflation.
Softer inflation expectations have created an upbeat risk mood on Monday, giving support to the Nikkei, said Charu Chanana, global market strategist and head of FX strategy at Saxo.
“However, higher Japanese yields could constrain gains.” The Nikkei was up 0.29% at 38,758.96 by the midday break, with trading volume thin owing to US and UK public holidays.
The broader Topix was up 0.31% at 2750.91.
With questions remaining about further policy tightening this year, investors were cautious as BOJ Governor Kazuo Ueda and his deputy Shinichi Uchida spoke in the Asian morning.
Japan’s 10-year government bond yield rose to the psychologically significant 1% mark last week amid hawkish signals from the BOJ, fanning policy jitters.
Nikkei drops 1pc on Uniqlo owner tumble
While the Nikkei touched the closely watched 39,000 level this month, it has failed to maintain the key range amid monetary policy uncertainty both abroad and domestically, as well as conservative revenue outlooks from Japanese companies.
The index rose to an all-time high of 41,087.75 on March 22, but retreated the following month.
On Monday, major semiconductor-related shares largely advanced to lift the Nikkei, tracking a strong performance by their US peers on the back of Nvidia earnings last week.
Socionext jumped 5.5% to become the second largest percentage gainer, behind Kansai Electric Power, up 6%.
Advantest, which counts Nvidia among its customers, advanced 1.7%, while AI-focused startup investor SoftBank Group gained 1.3%.
Among other index heavyweights, Uniqlo parent firm Fast Retailing climbed 0.8% to give the Nikkei an additional boost.
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