Friday, June 9

Japan financials lead strong Nikkei rebound; Fed looms large

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TOKYO — Japan’s financial stocks joined a global rally on Wednesday to put the Nikkei share average on course for its biggest gain in two months, even as investors braced for a crucial Federal Reserve policy decision later in the day.

Nomura Holdings and Daiwa Securities each posted gains in excess of 4% as investors took heart from assurances by US Treasury Secretary Janet Yellen that decisive action from regulators had stabilized the financial system.

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A sharp weakening in the safe-haven yen overnight also buoyed the Japanese market, with automakers getting a particular boost. Energy shares also rallied amid strong gains in crude oil prices, while gains for US tech shares helped lift Japanese chip stocks.

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“Worries about the financial sector have retreated one notch, and as a result the Japanese stock market is moving to retrace what it lost on Monday,” said Maki Sawada, a strategist at Nomura Securities.

However, with the Fed decision almost certain to impact global stock markets, “once the initial spate of buying is finished, Japanese stocks are likely to become top heavy,” she added.

The Nikkei rose 1.9% as of the midday recess, which if sustained would be its biggest gain since Jan. 18. It was at one point up 2% at 27,478.47, the highest level since Monday of last week.

Financials were the best performing sector, jumping 2.7%, followed by a 2.4% rally in energy shares.

The broader Topix added 1.8% to 1,964.37. It earlier touched 1,968.70 for the first time in a week.

Japanese markets were closed on Tuesday for a public holiday.

Money markets now lay 83% odds on a quarter point hike, up from closer to a coin flip earlier in the week.

Nissan led gains among automakers, surge 4.1%. Honda advanced 2.8%, while Toyota added 1.9%.

Chipmaking equipment giant Tokyo Electron gained 2.2%, and chip-testing equipment maker Advantest rose 2.8%. (Reporting by Kevin Buckland; Editing by Nivedita Bhattacharjee)