Tokyo Shares Track Global Rally On Dovish Fed Comments
Mohammad Ali (@ChaudhryMAli88) Published October 10, 2023 | 05:49 PM
Tokyo stocks jumped on Tuesday, in line with gains across Asia, as investors returned to play catch-up with the previous day's gains globally, boosted by dovish comments from Federal Reserve officials
Tokyo, (UrduPoint / Pakistan Point News - 10th Oct, 2023) Tokyo stocks jumped on Tuesday, in line with gains across Asia, as investors returned to play catch-up with the previous day's gains globally, boosted by dovish comments from Federal Reserve officials.
The benchmark Nikkei 225 index surged 2.43 percent, or 751.86 points, to 31,746.53, while the broader Topix index rose 2.12 percent, or 48.11 points, to 2,312.19.
Traders were cheered after Fed decision-makers suggested they could hold off further interest rate hikes this year owing to a spike in US Treasury yields that have tightened credit conditions.
Market players were also monitoring developments in the Middle East after Hamas launched a deadly attack on Israel at the weekend, with fears that the violence could spread to other areas of the region.
"The market remains very concerned over the potential for the war (between Hamas and Israel) to escalate into other fronts and players," said Rodrigo Catril of National Australia Bank.
However, dovish remarks by Fed policymakers provided a catalyst to buy.
Among them was bank vice chair Philip Jefferson, who said the recent spike in US Treasury yields to multi-year highs could provide the necessary restraint on credit that would be achieved by higher interest rates.
His comments echoed those of Dallas Fed President Lorie Logan, who suggested that if bond market costs were on the rise, that "could do some of the work of cooling the economy for us, leaving less need for additional monetary policy tightening".
While fears about another rate hike this year were tempered, the dollar rose to 148.87 yen from 148.53 yen in New York.
Among major shares in Tokyo, energy firms were big winners owing to a spike in oil prices caused by supply worries from any unrest in the Middle East.
Oil and gas exploration firm Inpex jumped 8.58 percent to 2,081 yen and crude refiner Idemitsu Kosan added 5.36 percent to 3,242 yen.
Toyota rose 2.04 percent to 2,624.5 yen and Nintendo put on 1.06 percent to 6,311 yen, while SoftBank Group advanced 3.47 percent to 6,290 yen and Takeda Pharmaceuticals jumped 2.10 percent to 4,578 yen.
Electronics giant Panasonic Holdings surged 4.92 percent to 1,620.5 yen and chip-making equipment maker Tokyo Electron added 3.40 percent to 20,100 yen.
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