Tokyo stocks surged more than 10 percent on Tuesday, rebounding from a record selling the previous day, prompted by concerns over the US economy and the stronger yen.
The benchmark Nikkei 225 index gained 10.33 percent to 34,707.78, adding 3,249.36 points in the process. The broader Topix gained 228.49 points to 2,455.64, up by 10.26 percent.
On Monday, the Nikkei had plummeted by the largest single day in terms of points in its history to close down 12.40 percent or 4,451.28 points.
“The market is seen starting sharply higher, as it should perform a natural rebound after yesterday’s plunge while dollar-yen moves towards the yen’s depreciation,” Monex brokerage explained. Trading, however will remain nervous with focus on forex movements, the brokerage said. Nomura Securities said the market is likely to stay very volatile this week, and attributed Tuesday’s gains to a “technical rebound” from Monday’s sharp decline.
The yen retreated to 146.01 per dollar during morning trade, having jumped to 141.70 on Monday – the highest since early January. The stronger yen directly hurts Japanese exporters, and recent rallies – including Monday’s jump in the wake of dovish central bank policy decisions – have reversed long-standing trends.
Last week, the Bank of Japan lifted interest rates for the first time in 17 years and chequered another rise may be in the pipeline. On the other side of the Pacific, however, the US Federal Reserve indicated that a rate cut could happen as early as September. Among major shares in Tokyo on Tuesday:
- Honda soared 14.90 percent to 1,438 yen, following reports of an anticipated record quarterly profit announcement.
- Toyota increased by 10.51 percent to 2,466.5 yen.
- Sony Group advanced 7.44 percent to 12,125 yen.
- Nintendo added 9.87 percent to 7,259 yen.
- Semiconductor shares also performed well, with Tokyo Electron climbing 12.26 percent to 24,760 yen and Advantest rising 9.11 percent to 5,797 yen.
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Source: Moneycontrol
News Desk
