TOKYO: Then the Nikkei share average went up on Tuesday on expectations of a softer yuan and exporter shares, as stocks linked to China gained as Beijing posed new promises of an “appropriately loose” monetary policy next year.
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Niikkei stood at 39,197.42 at midday; 0.09% up from the previous close while Topix was 0.14% up to 2,738.26.
Some exporter shares advancing included car makers because the yen fell against the US dollar.
In the session, this greenback was at, 151.14 yen.
The biggest risers were in the car industry where Toyota Motor gained 0.9% while Suzuki Motor increased by 3.5% and Honda motor companies were up by 1.8%.
Some of the equity with specific links to China rose in line with the announcement that Beijing will officially adopt an easier monetary policy and more expansionary fiscal policy on Monday saw shares in Japanese industrial robot makers Fanuc and Yaskawa Electric rise by 3.6% and 2.6% respectively.
Shiseido climbed 4.9 % and was the only Niikkei index player to post the biggest percentage gain.
While some of Japan’s chip-related shares erased their earlier gains, AI leader Nvidia and other technology shares listed in the US dropped after China’s market regulators began investigating Nvidia for suspected violation of anti-monopoly laws in the Chinese market.
Stocks of Advantest Corp., which is a maker of chip-testing equipment and has the American technology firm Nvidia among its clients, also did not budge even though it traded flat, down from earlier in the day.
However, early gains in Niikkei were erased on the back of the market gearing up for next week’s Federal Open Market Committee (FOMC) and Bank of Japan (BOJ) policy meeting.
Japan’s Nikkei tracks Wall Street higher; profit-taking caps rise
There is an observed bias of all world central banks including the Fed cut but there’s an observable ambiguity with the BOJ action. This means that if the latter hikes the stronger yen will erode Japanese stocks according a Capital.com senior financial market analyst, Kyle Rodda.
However, the physical indications from the Fed on policy next year may offset the dollar-yen pair according to Rodda.
In writing this the numbers to watch this week include the; US inflation and the BOJ “Tanaka” survey of the money base.
Other key stock included: The Niikkei 225 companies’ weights are adjusted downward in the following order: Tokyo Electron, down by 2.2 % in Chip equipment, Sony Group Corporation, down by 4 % as it is an entertainment conglomerate, and Fast Retailing Company Limited, the owner of Uniqlo, down by 1.1%.
FAQs
1. What is the Nikkei?
The Niikkei is Japan’s stock market index, officially known as the Niikkei 225, comprising the top 225 companies listed on the Tokyo Stock Exchange.
2. Why does a weaker yen impact the Nikkei positively?
A weaker yen benefits Japanese exporters, as their goods become more competitive internationally, boosting company profits and stock values.
3. What is China’s policy shift mentioned?
It refers to unexpected changes in China’s economic or financial policies, such as monetary easing or market reforms, which can influence global markets, including Japan’s.
4. How does China’s economy affect the Nikkei?
China is a major trading partner for Japan. Positive economic moves by China often enhance investor sentiment and benefit Japanese companies that trade with or operate in China.
5. What sectors in the Nikkei benefit most from these factors?
Export-heavy sectors like technology, automotive, and machinery typically gain from a weaker yen and increased demand linked to China’s policy changes.
6. Is this rise in the Nikkei sustainable?
The sustainability depends on broader market trends, the continuation of supportive factors like the yen’s weakness, and the long-term effects of China’s policy changes.