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Nikkei ends over 3% higher as interest rate hike concerns ease

This file photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) -- Tokyo stocks ended sharply higher Tuesday, with the benchmark Nikkei logging its largest point gain in one year of over 3 percent, as concerns about an early U.S. interest rate hike eased.

    The 225-issue Nikkei Stock Average ended up 873.20 points, or 3.12 percent, from Monday at 28,884.13, after briefly losing 1,100 points the previous day. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 60.08 points, or 3.16 percent, higher at 1,959.53.

    Every industry category gained ground, led by marine transportation, warehousing and harbor transportation service, and rubber product issues.

    The U.S. dollar rose to the mid-110 yen range on expectations a U.S. interest rate hike would widen the rate gap between the United States and Japan, while gains in U.S. shares led investors to sell the safe-haven yen, dealers said.

    At 5 p.m., the dollar fetched 110.48-50 yen compared with 110.26-36 yen in New York and 110.02-04 yen in Tokyo at 5 p.m. Monday.

    The euro was quoted at $1.1901-1902 and 131.49-53 yen against $1.1912-1922 and 131.44-54 yen in New York and $1.1883-1885 and 130.74-78 yen in Tokyo late Monday afternoon.

    The yield on the benchmark 10-year Japanese government bond rose 0.010 percentage point from Monday's close to 0.050 percent, as the debt was sold on improved sentiment following a rise in Tokyo shares.

    A relative sense of calm returned to the global stock markets, with the Nikkei gaining throughout the day, briefly soaring shy of 900 points.

    The market had taken a blow Monday after St. Louis Federal Reserve President James Bullard said late last week an initial interest rate hike could be seen as early as late 2022, after the Fed indicated the same week it may raise rates in 2023, already earlier than expected.

    "Investors are buying back stocks after the market overreacted the previous day," said Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co.

    Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said, "Market participants have priced in an interest rate hike as soon as 2022, as fears for an early rise were eased."

    Investors are watching incoming U.S. economic data closely for clues about the timing of stimulus tapering, Ichikawa added.

    On the First Section, advancing issues outnumbered decliners 2,107 to 69, while 17 ended unchanged.

    Marine transportation issues climbed on expectations of higher earnings growth, a day after Mitsui O.S.K. Lines Ltd. forecast a more than twofold increase in net profit for the business year through March 2022 from a year earlier.

    Mitsui O.S.K. Lines jumped 490 yen, or 10.2 percent, to 5,300 yen, while Nippon Yusen advanced 530 yen, or 10.3 percent, to 5,670 yen.

    Export-related shares surged on a weaker yen, with Fujitsu gaining 945 yen, or 5.0 percent, to 20,005 yen and Sony rising 330 yen, or 3.1 percent, to 10,870 yen.

    Trading volume on the main section fell to 1,173.25 million shares from Monday's 1,301.08 million shares.

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