Tuesday, July 5

Japan’s Nikkei recovers from 1-month low on Wall Street gains after Fed move


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TOKYO — Japan’s Nikkei share average rebounded from a more than one-month low on Thursday, tracking overnight Wall Street strength, after the Federal Reserve in an expected move hiked interest rate by 75 basis points, as it tries to rein in US inflation.

The Nikkei rose 1.4% to 26,694.05 by the midday break and was set to snap a four-day losing run that took it to its lowest close since May 12 on Wednesday, but it was well off the day’s highs as an approach toward the psychological 27,000 mark was met with profit taking.

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The broader Topix gained 1.26% to 1,879.29.

Fed Chair Jerome Powell said that a 75 bp increase “seemed like the right thing to do at this meeting,” but added that hikes of that size, the biggest since 1994, were not likely to be “common.”

However, he flagged that the resulting slowdown from tighter policy was likely to lead to a rise in unemployment.

“The uncertainty surrounding US monetary policy and the economic outlook have not gone away, and market volatility is likely to remain, so in that environment you can’t just jump back in and buy stocks,” said Koji Toda, a fund manager at Resona Asset Management.

“It doesn’t feel like there are new longs.”

Among heavyweight movers, shares of clothing brand Uniqlo’s owner Fast Retailing gained 3.43% and Toyota Motor jumped 3.53%.

Sony Group added 1.93%, while Nintendo advanced 1.6%.

Startup investor SoftBank Group was 0.76% higher.

(Reporting by Tokyo markets team; Editing by Rashmi Aich)



financialpost.com

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