yen rally-drop in the yen against the dollar

Stocks turned higher on the Tokyo Stock Exchange on Thursday, backed by an overnight rise in U.S. equities.

The 225-issue Nikkei average climbed 89.89 points, or 0.45 percent, to close at 20,220.30. On Wednesday, the key market gauge retreated 94.68 points.

The Topix index of all first-section issues finished up 9.70 points, or 0.60 percent, at 1,624.07, to log its highest finish since Aug. 19, 2015, after losing 4.65 points the previous day.

Investors took heart from Wednesday’s rebound in the U.S. stock market, where financial issues gained ground on the back of higher long-term interest rates.


Japanese mega-bank groups and other financial issues followed suit, pushing up the overall Tokyo market, brokers said.

A drop in the yen against the dollar also helped lift Tokyo stocks, brokers said.

Market players purchased stocks vigorously as “the dollar stood above ¥112” during Thursday’s session, an official of a bank-affiliated securities firm said.

Despite the yen’s weakening, however, investors refrained from buying automakers actively due to “uncertainty over the course of U.S. auto sales,” said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.


The Nikkei will soon surpass the 22-month closing high of 20,230.41 marked on June 20, the official of the bank-linked securities firm predicted, pointing to the recent strength of the Topix index.

Rising issues far outnumbered falling ones 1,513 to 398 in the TSE’s first section, while 110 issues were unchanged.

Volume slightly increased to 1.95 billion shares from Wednesday’s 1.92 billion shares.

Mega-banks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, insurer Dai-ichi Life, and brokerage firm Nomura were upbeat, reflecting the firmness of financial stocks in New York on Wednesday.


J. Front Retailing jumped 8.65 percent after the department store operator announced on Wednesday that its group operating profit from March to May surged 36.8 percent from a year earlier to ¥12.99 billion thanks chiefly to brisk earnings at its Ginza Six commercial complex, which opened in April in Tokyo’s posh Ginza district, brokers said.

Other major winners included steel makers JFE Holdings and Nippon Steel & Sumitomo Metal and game maker Nintendo.


By contrast, Toshiba dropped 3.69 percent after the struggling machinery and electronics maker on Wednesday sued its chip business partner, Western Digital Corp. of the United States, for allegedly blocking the planned sale of its flash memory unit, the key to Toshiba’s turnaround.

Nitori Holdings also met with selling after the furniture retailer said Wednesday that its operating profit from March to May fell 5.6 percent to ¥25.72 billion.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average climbed 70 points to close at 20,210.

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Pramod Baviskar

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