TOKYO: Japan’s Nikkei share average surged on Wednesday, with tech stocks leading the charge in a broad-based rally after Wall Street closed higher overnight on increasing prospects of an interest rate cut in December.
The Nikkei closed 1.9 percent higher at 49,559.07, while the broader Topix gained 2 percent.
Wall Street extended its rally on Tuesday as a spate of economic data appeared to support the case for the US Federal Reserve to implement its third and final rate cut of the year in December, while softness in the tech sector limited the Nasdaq’s gains.
“Expectations of more Fed rate cuts lifted US stocks overnight and that supported gains in the Japanese stock market today,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.
In Japan, heavyweight technology stocks rose. Technology investor SoftBank Group jumped 5.7 percent after plunging nearly 20 percent in the previous two sessions.
Chip-testing equipment maker Advantest climbed 2 percent and Uniqlo brand owner Fast Retailing gained 1.8 percent.
“With foreign investors leaving for the year-end holiday season, the market will start focusing on smaller stocks and that will keep the market supported,” Ikeda said.