Business / Financial Markets | TSE DATA & REPORT

Nikkei turns sharply higher on yen's fall

JIJI

The Nikkei average staged a strong rally on the Tokyo Stock Exchange Friday, boosted by the yen’s drop against the dollar and higher U.S. stock prices.

The 225-issue Nikkei average jumped 263.80 points, or 1.29 percent, to end at 20,666.07, the best finish since Dec. 19. On Thursday, the key market gauge fell 40.48 points.

The Topix index of all first-section issues closed up 14.39 points, or 0.93 percent, at 1,557.59, after gaining 5.43 points the previous day.

Stocks spurted from the outset on purchases activated by the dollar’s rise above ¥109, market sources said.

The Tokyo market also got a boost from Wall Street’s extended advance Thursday, which was supported in part by a newspaper report that said U.S. Treasury Secretary Steven Mnuchin had proposed scrapping some or all tariffs on Chinese imports, the sources said.

The Wall Street Journal report suggested that the United States and China are moving closer to each other in their trade negotiations, helping investors turn less risk-adverse, Mitsuo Shimizu, chief strategist at Aizawa Securities Co., said.

The market attracted “futures-linked repurchases heartened by higher stock prices abroad,” Shimizu added.

Akira Tanoue, senior investment strategist at Nomura Securities Co., indicated that investor sentiment was lifted by the resilience of Nidec shares after the electronic parts-maker unexpectedly on Thursday issued a profit warning for the year through March, citing rapidly deteriorating earnings in China.

But an official at a bank-affiliated securities firm noted that a number of major Japanese companies may report bleak earnings results and forecasts from now on, likening Nidec to “a canary in a coal mine.”

Rising issues outnumbered falling ones 1,538 to 525 in the TSE’s first section, while 65 issues were unchanged.

Volume edged up to 1.150 billion shares from Thursday’s 1.148 billion shares.

Industrial robot producer Fanuc, construction machinery-maker Komatsu and other China-related issues attracted buying amid worries about the U.S.-China trade dispute receding to some extent, brokers said.

Other major winners included clothing retailer Fast Retailing and chip-making equipment-maker Tokyo Electron.

Nidec managed to end 1.13 percent lower, after suffering a precipitous fall.

Also weaker were cosmetics maker Shiseido and air conditioner manufacturer Daikin.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average shot up 280 points to finish at 20,630.