Japan's Nikkei climbs a 2nd day, led by tech on Fed rate cut hopes
Japan’s Nikkei share average rose for a second consecutive day, driven by tech stocks amid optimism for a potential U.S. rate cut. The Nikkei 225 Index increased by 0.4% to close at 42,807.82, with SoftBank and Advantest contributing significantly. Fed Chair Jerome Powell hinted at a possible rate cut, while Bank of Japan Governor Kazuo Ueda noted wage growth could lead to interest rate hikes. TOTO saw a 7.9% rise after announcing a new plant in Georgia, while Terumo fell 4% due to a $1.5 billion acquisition.
(Updates prices)
By Rocky Swift
TOKYO, Aug 25 (Reuters) - Japan’s Nikkei share average rose for a second straight session on Monday, led by tech shares as the domestic market reacted to optimism for looser monetary policy in the U.S.
The Nikkei 225 Index (.N225) gained 0.4% to close at 42,807.82. The broader Topix (.TOPX) added just under 0.2%.
SoftBank Group (9984.T) and chip-testing equipment maker Advantest (6857.T) were among the biggest contributors to the Nikkei’s advance, climbing 3.5% and 1.1%, respectively.
In a closely-watched speech at the Federal Reserve’s annual Jackson Hole symposium on Friday, the central bank’s Chair, Jerome Powell, signalled the possibility of a rate cut next month.
Going in the other direction, Bank of Japan Governor Kazuo Ueda highlighted wage growth that is feeding into conditions for a resumption of interest rate increases.
The divergence in the central bank’s policy led to a surge in the yen, crimping revenue prospects for Japanese exporters.
Increasing prospects for a U.S. rate cut acted as tailwind for tech stocks on Wall Street and in Japan, said Nomura strategist Fumika Shimizu.
“As a result, Japanese semiconductor-related stocks are also showing strength and leading the market,” Shimizu said.
“There is a possibility that the recent slight upward trend in the yen is weighing on the market.”
There were 118 advancers on the Nikkei index against 107 decliners.
TOTO (5332.T) jumped 7.9% to be the biggest percentage gainer on the benchmark after the luxury toilet maker said on Friday it was opening a $224 million plant in the U.S. southern state of Georgia, shifting production away from Asia.
The biggest loser on the index was Terumo (4543.T) , down 4%, after saying it would spend $1.5 billion to buy Britain-based Organox, a maker of organ preservation technology.
