TOKYO: Tokyo stocks ended higher on Wednesday with investors reassured by drops in US and UK yields, which fuelled expectations for a slowdown in rate hikes.

The benchmark Nikkei 225 index was up 0.67 percent, or 181.56 points, to end at 27,431.84 – its highest closing value in over a month – while the broader Topix index was up 0.58 percent, or 11.07 points, at 1,918.21.

The dollar stood at 147.86 yen, against 147.92 yen in New York late Tuesday.

Wall Street stocks rallied for a third straight day, propelled by a drop in US Treasury yields following disappointing consumer confidence data.

The confirmation of former finance chief Rishi Sunak as Britain’s new prime minister, as well as his vow to usher in economic stability, provided relief to bond markets, where the yields on British government bonds fell.

While the view persists that the Federal Reserve will likely enact another 0.75 percentage point hike in November, “hopes are beginning to grow that (the central bank) may gradually pivot toward slowing its pace of hikes after the next meeting”, Makoto Sengoku, senior equity market analyst at Tokai Tokyo Securities, told AFP.

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“Stocks have been susceptible to falls in the event of rate hikes, but investors appear more hopeful than before that there is going to be a slight shift away from such situations,” he said.

Among major shares in Tokyo, SoftBank Group added 1.37 percent to 6,031 yen, Sony Group gained 0.94 percent to 9,884 yen and Toyota was up 0.19 percent to 2,020 yen.

Uniqlo operator Fast Retailing rose 0.18 percent to 83,190 yen.