Tokyo stocks rise on easing concerns over Fed rate hikes


This file photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) — Shares in Tokyo ended higher on Thursday as concerns over aggressive monetary tightening by the U.S. Federal Reserve eased after Chairman Jerome Powell said he backed a rise in prices. interest rate more modest this month than some investors expected.

The 225-number Nikkei Stock Average ended up 184.24 points, or 0.70%, from Wednesday at 26,577.27. The broader Topix index of all First Section issues on the Tokyo Stock Exchange ended 21.86 points, or 1.18%, up at 1,881.80.

All industry categories won, with the exception of information and communication issues. Major gainers included shipping, petroleum and coal products and banking issues.

Crude oil futures continued their upward trend on expectations that economic sanctions imposed on Russia following its invasion of Ukraine will significantly reduce energy supplies.

West Texas Intermediate crude futures, the US oil benchmark, briefly rose above $115 a barrel in New York on Thursday, the highest since September 2008.

The US Dollar was firm in the upper 115 yen range, bought following an overnight rise in US Treasury yields.

At 5 p.m., the dollar was worth 115.72-74 yen against 115.47-57 yen in New York and 115.15-16 yen in Tokyo at 5 p.m. Wednesday.

The euro was at 1.1097-1098 dollars and 128.42-46 yen against 1.1114-1124 dollars and 128.49-59 yen in New York and 1.1093-1094 dollars and 127.74-78 yen in Tokyo late Wednesday afternoon.

The yield on Japan’s benchmark 10-year government bond rose 0.035 percentage points from Wednesday’s close of 0.165% as investors sold the debt, following an overnight drop in the market. US Treasury. Bond yields move inversely to prices.

Tokyo stocks rose early on, following overnight rallies on Wall Street, after Powell told a congressional committee on Wednesday he was “inclined to propose and support” a rate hike of 0 .25 points by the US central bank in March in a context of rising inflation in the country.

Investors focused on the pace of possible U.S. rate hikes, with some pricing in a 0.50 point hike to tame inflation amid rising oil prices, brokers said.

The Fed has kept its benchmark interest rate between zero and 0.25% since March 2020 to support the economy affected by the coronavirus pandemic. Interest rate increases result in higher borrowing costs for businesses and households.

“Excessive concerns over U.S. interest rate hikes eased as Powell indicated the Fed would proceed with caution in their conduct. But the market was weighed down by concerns over the surge in futures on crude oil,” said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.

Gasoline prices in Japan have risen for eight consecutive weeks, while some companies have raised prices for their products to pass on rising costs.

Market participants are watching developments in a second round of ceasefire talks between Russia and Ukraine, which could take place on Thursday.

On the first section, the advancing numbers outnumbered the declining numbers by 1,424 to 667, with 89 ending unchanged.

Energy-related stocks drew attention to expectations that crude oil prices will continue to rise after the Organization of the Petroleum Exporting Countries and its allies said on Wednesday they would not change oil targets. group production for April.

Idemitsu Kosan gained 200 yen, or 6.2%, to 3,410 yen and Cosmo Energy Holdings gained 143 yen, or 5.2%, to 2,872 yen.

Heavyweight Nikkei Fast Retailing fell 730 yen, or 1.2%, to 62,520 yen after operator of casual wear chain Uniqlo said on Wednesday its February domestic sales fell from the previous year as spring clothing sales got off to a slow start.

Trading volume on the main section fell to 1,234.94 million shares from 1,425.53 million shares on Wednesday.


About Author

Comments are closed.