Nikkei posts solid rise despite strong yen financials higher

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TOKYO: Japan’s Nikkei share average rose significantly on Thursday as investors bought back recently-battered stocks after U.S. markets climbed overnight, shrugging off stronger-than-expected inflation data.
The Nikkei ended 1.5 percent higher at 21,464.98, after tumbling to a four-month low on Wednesday and briefly dipping below its 200-day moving average.
A total of 28 out of 33 sectors were in positive territory, with financial stocks and exporters outperforming, ignoring the strong yen.
The dollar dropped below Wednesday’s low of 106.725 yen and fell as far as 106.30 yen, its weakest level since November 2016. That marked a drop of 3.8 percent from its early February peak near 110.50 yen.
“If you are a logical investor, you’d buy when you think stocks will rise and you’d sell when you think stocks will fall. But today’s trade is not based on logic,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Short-term investors like overseas hedge funds were shorting Japanese stocks and futures since late January. They have their trades programmed to sell Japanese stocks when U.S. stocks fell. But since U.S. stocks rose overnight, they had to close such positions as there was a risk of losing.”
Japanese stocks have seen volatile trade in recent weeks after hitting 26-year highs last month.
Some traders say that repercussions from Wall Street’s recent tumble have not undermined Japanese stocks’ attractive valuations.

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