The Tokyo market appears to have shrugged off fears about the Russian ruble crisis, with investors bullish as they prepared for the last few days of trading this year, analysts said. While plunging oil prices and the Russian currency crisis threatening to deliver investors a lump of coal, spirits remained high after the US Federal Reserve this week hinted that it was on track for a mid-2015 interest rate hike as data continues to show a recovery in the world's number one economy.
That helped lift the dollar against the yen, boosting shares of Japanese exporters whose profitability benefits from a weak currency. Trading in the coming week will likely be thin, with many international players leaving the market for the Christmas break. The Tokyo Stock Exchange will be closed Tuesday for a national holiday, the emperor's birthday. Investors will be eyeing a slate of key data, including Japanese inflation and industrial production, at the end of the week.
"If worries recede that (the Fed) might hike rates early, while the US economy sees stable growth and low inflation, it is only a matter of time before the Dow Jones Industrial Average will renew its recent highs," SMBC Nikko Securities said in a note. On Friday, the Nikkei 225 index at the Tokyo Stock Exchange climbed 411.35 points to finish at 17,621.40, thanks largely to the robust performance on Wall Street shares overnight and a rising dollar. The headline index tacked on a weekly gain of 1.44 percent. The broader Topix index of all first-section shares rose 2.42 percent, or 33.29 points, to 1,409.61, for a weekly gain of 0.71 percent. Daiwa Securities said the Russian economy remained a risk with the ruble in crisis, but international economists have also pointed out that Moscow has ample foreign reserves to avoid an immediate catastrophe.
"We believe excessive worries about Russian default are unnecessary," Daiwa said. Earlier this month, the Tokyo market dropped on profit taking but that supplied an opportunity for bargain buying, SMBC Nikko said. "While the effects of the falling oil prices need to be watched, shares in companies with solid earnings should be bought on dips," it added.
Meanwhile, Bank of Japan policymakers on Friday held off fresh monetary easing measures at the end of their two-day meeting, after inflating the bank's asset-buying scheme in October. On Friday, Toyota shares jumped 4.30 percent to 7,562 yen and Uniqlo clothing chain operator Fast Retailing gained 2.32 percent to 44,730 yen. Takata rose 0.52 percent to 1,330 yen after the embattled auto parts maker issued an open letter in major newspapers pledging to step up its response to an air-bag defect crisis that has been linked to at least five deaths in the US and Malaysia.
Comments
Comments are closed.