Tokyo equities soar on optimism that the United States will cease raising interest rates.
On Wednesday, the Nikkei stock index peaked for the year due to the anticipation that the U.S. Federal Reserve would not increase borrowing rates after weaker inflation statistics. Tokyo equities soar on optimism that the United States will cease raising interest rates. The Nikkei Stock Average rose 823.77 points, or 2.52%, to 33,519.70, its highest finish since September 15. The Topix index rose 27.93 points, or 1.19 percent, to 2,373.22. Oil and coal, precision instruments, and electric appliance concerns drove the primary market gains.
The decline of long-term U.S. interest rates on October inflation data caused the U.S. dollar to remain weak in Tokyo. This raised speculation that the Fed may be hiking rates. The dollar traded at 150.68-69 yen, compared to 150.34-44 in New York and 151.63-65 in Tokyo on Tuesday.
After the rise of Wall Street overnight, stocks rose as U.S. consumer prices grew 3.2 percent last month from a year earlier, down from 3.7 percent in September. “Changes in views on monetary policy were a primary force behind rises today,” said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
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As long-term U.S. Treasury yields fell, the paper was acquired on the anticipation that rate hikes may end. Prices inversely affect bond yields. Analysts said the U.S. House of Representatives passing a financing plan to avoid a government shutdown helped the market. Technology and semiconductor stocks climbed, following U.S. markets.
Advantest jumped 334 yen, or 7.5 percent, to 4,797 yen; Tokyo Electron rose 885 yen, or 3.8 percent, to 24,115. Refiner Idemitsu Kosan rose 634 yen, or 18.3%, to 4,101 yen after raising its earnings projection for the entire year ending March due to increased crude oil prices.
However, banking and insurance stocks slumped on the potential of fewer profits as Japanese long-term interest rates fell after U.S. yields fell overnight. Mizuho Financial Group declined 61.0 yen, or 2.4 percent, to 2,492.5 yen, while Mitsubishi UFJ Financial Group fell 25.0 yen, or 1.9 percent, to 1,259.0.
