Japan’s Nikkei set to snap five-day losing streak as JGBs extend gains

TOKYO: Japan’s Nikkei share average rose more than 1% on Thursday after a five-session losing streak, as bonds extended gains and US President Donald Trump dropped tariff threats and ruled out seizing Greenland by force.

The Nikkei rebounded 1.68% to 53,667.72 by 0136 GMT and was poised to snap its longest streak of daily losses in a year. The broader Topix was up 0.95% at 3,623.72.

The Japanese stock market has been very volatile this month.

It jumped last week on high expectations for Prime Minister Sanae Takaichi’s loose spending policy. It pulled back this week on fiscal concerns after Takaichi pledged to suspend an 8% food levy for two years.

Takaichi is set to dissolve parliament on Friday to trigger a snap election. Super-long government bonds tanked this week, sending their yields to record highs.

“High volatility in Japanese government bond (JGB) yields this week scared investors in equities,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

“The market took it as a sell-off of Japan.”

The 30-year JGB yield extended declines for a second session on Thursday, slipping as much as 4 basis points to 3.68% after hitting a record high of 3.880% on Tuesday.

Yields move inversely to bond prices.

On Thursday, the Japanese stock market was also underpinned by Wall Street’s gains overnight, following news that a framework for an agreement on Greenland had been reached and the possibility of new US tariffs on European allies had been averted.

Among individual stocks, chip-related Advantest and Tokyo Electron rose more than 5% each.

SoftBank Group rose more than 5%. Disco surged 17% after the maker of precision processing equipment projected a 2% increase in annual net profit.

More Japanese companies will release their earnings for the October-December quarter starting next week, providing cues for the stock market.