Thursday, May 19, 2016

Tokyo shares push higher in opening trade on weaker yen

Tokyo shares opened firmly higher Thursday, as a sharply weaker yen boosted exporters.

The gains followed a weak lead from Wall Street after minutes from the Federal Reserve's April policy meeting implied policymakers viewed an interest rate hike in June as a much more serious possibility than the market believed.

The minutes sent the dollar surging 1.0% against the yen, changing hands at 110.20 yen ($1.38) in New York.

This was the first time the greenback rose above the 110-level since the Bank of Japan on April 28 surprised markets by holding off fresh stimulus, a move that sent the Japanese currency soaring more than two% to 109.15 yen from 111.71 yen.

On Thursday, the dollar held most of its gains from the US session, trading at 110.13 yen.

Japanese exporters were lifted by the weaker currency, a plus for their profitability as it tends to spur demand for their shares, analysts said.

"The Nikkei looks set for a very strong day as the dollar-yen exchange rate moved back into the 110 handle," Angus Nicholson, a market analyst at IG in Melbourne, said in a commentary.

"After better than expected (gross domestic product) and now another 0.8% weakening of the yen, it is likely to be smiles all around for Japanese exporters."

The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 0.98%, or 162.77 points, to 16,807.46 in opening deals, rebounding from a weak session the previous day.

The broader Topix index of all first-section shares advanced 0.82%, or 10.92 points, to 1,349.30.

Japan's economy grew a better-than-expected 0.4% in the first quarter of this year to sidestep a recession, preliminary government figures showed on Wednesday.

Shares of Suzuki rebounded from a 9.4% loss the previous session, surging 5.8% to 2,765.5 yen.

The Japanese small-car maker on Wednesday admitted that it was not using fuel-economy and emissions testing methods required by the government, but it denied deliberately manipulating data to make cars seem more efficient.

On Wall Street, the Dow finished less than 0.1% lower. However, the S&P 500 was up less than 0.1% and the tech-rich Nasdaq closed 0.5% higher.

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