Nikkei Soars, Wall Street Rebound Boosts Japanese Tech Stocks
The Nikkei 225 index surged 4.3% to above 56,500 on Thursday, while the Topix index rose 3.5% to 3,760. These gains pared earlier-week losses and followed a Wall Street rebound led by technology stocks.
The Japanese equity rally came as oil prices stabilized and inflation concerns eased, although the US-Iran conflict showed no signs of abating. The market believes the stock rally will be difficult to sustain without clarity on the duration of the conflict and the extent to which it could impact global growth and inflation.
Bank of Japan Governor Kazuo Ueda warned that escalating tensions in the Middle East could have a material impact on the Japanese economy. The statement reinforced signals that the central bank could potentially keep policy interest rates unchanged for an extended period, amid external risks that could undermine the inflation and activity outlook.
Technology stocks led the gains, with Fujikura rising 7.3%, Advantest 6%, and Tokyo Electron 4.9%. The financial sector also outperformed the market, supported by gains in Mitsubishi UFJ Financial, Mizuho Financial, and Sumitomo Mitsui, each of around 5% to 9%.
Going forward, market participants will focus on energy price stability, developments in the US-Iran conflict, and their implications for inflation expectations and the Bank of Japan's policy path. These will determine whether the Japanese index's strengthening trend continues or remains vulnerable to global risk volatility. (asd)
Source: Newsmaker.id
