Source: AFP
Tokyo’s main Nikkei index closed more than 10 percent higher on Tuesday, retreating from a record sell-off the previous day on worries about the U.S. economy and a stronger yen.
The Nikkei 225 jumped 10.23%, or 3,217.04 points, to end at 34,675.46, while the broader Topix gained 9.30%, or 207.06 points, to 2,434.21.
On Monday, the Nikkei fell more than 12 percent, or 4,451.28 points — the biggest point drop in its history.
Prime Minister Fumio Kishida said on Tuesday that it was best to take the sharp swings in stride, as analysts predicted the volatility could continue for days.
“The stock market is moving again today and I think it’s important to judge this situation calmly,” Kishida said at a scheduled news conference.
“We will continue to monitor the situation with a sense of urgency and carry out economic and fiscal management in close cooperation with the Bank of Japan,” he said.
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Nomura Securities said the market will likely remain volatile this week. “Today’s gain can be explained in one sentence: a technical recovery” after the sharp decline, he said.
IwaiCosmo Securities reported that concern about the US economy was partially eased by a better-than-expected improvement in business sentiment in the services sector for July.
“In Japan, real wages in June turned positive for the first time in 27 months, which also brought some relief,” the brokerage added.
The yen was at 145.94 yen against the dollar, up from 146.28 yen in early trade. On Monday, the Japanese currency hit 141.70, its strongest since early January.
A higher yen is negative for Japanese exporters, and recent rallies have been fueled by central bank policy decisions that have reversed months of trends.
The Bank of Japan last week raised interest rates for the second time in 17 years, with talk of another rate hike to follow, while the US Federal Reserve hinted at a cut as soon as September.
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Among major stocks in Tokyo on Tuesday, Honda rose 14.70 percent to 1,435.5 yen after it reported it was expected to post record quarterly profit.
Toyota rose 12.81% to ¥2,518 and Sony Group rose 9.12% to ¥12,315.
Source: AFP
