Tokyo stocks jumped on a weak yen Wednesday as Federal Reserve boss Janet Yellen signalled that US interest rates could rise at any time, but Toshiba tumbled again as it warned of massive losses. Yellen presented an upbeat view of the world's largest economy in her testimony to Congress, noting labour market conditions continue to improve and inflation is inching up to the Fed's two percent target.
She confirmed another rate increase was on the way, which leaves open the possibility of a move at the March 14-15 policy meeting. That propelled the dollar to 114.35 yen from 114.27 yen in New York and sharply up from the 113.40 yen in Tokyo earlier Tuesday. A weaker yen is good news for Japan's exporters as it makes their products more competitive overseas and inflates repatriated profits.
Tokyo's benchmark Nikkei 225 index rose 1.03 percent, or 199.00 points, to close at 19,437.98, while the Topix index of all first-section issues finished 0.95 percent, or 14.57 points, higher at 1,553.69. Wall Street's three main indexes set records for a fourth straight session Tuesday after President Donald Trump's promise last week to unveil "phenomenal" US tax reforms soon.
"In principle, the Trump rally continues," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities. "Yellen seemed so positive" towards hiking interest rates, he told AFP. Mobile carrier SoftBank jumped 1.58 percent to 8,670 yen after it announced it will buy US asset-management firm Fortress Investment Group for $3.3 billion in cash.
Toyota tacked on 0.57 percent to 6,491 yen while camera and copier maker Canon rose 1.00 percent to 3,323 yen. Toshiba sank 8.74 percent to 209.7 yen, extending Tuesday's eight percent selloff. The drop was sparked by growing fears about the firm's finances as it issued a grim preliminary earnings forecast Tuesday. The company said it was on track for a net loss of 390 billion yen in the fiscal year to March, hit by a writedown topping 700 billion yen at US nuclear division Westinghouse Electric.
Toshiba's chairman quit his post as it delayed the release of formal financial results and also revealed it was investigating possible misconduct by senior executives at the division. A whistleblower had complained top executives had exerted "inappropriate pressure" over accounting at the US firm, Toshiba said. The revelation comes less than two years after Toshiba - one of Japan's best-known companies - was hammered by an embarrassing profit-padding scandal.
Comments
Comments are closed for this article.