Japan’s Nikkei share average rose on Monday morning as comments from a U.S. central banker supported the dollar against the yen, bolstering exporter stocks while rising U.S. yields helped financial stocks outperform. The Nikkei gained 0.8 percent to 18,811.62 in midmorning trade.
New York Federal Reserve President William Dudley on Friday said there may only be a “little pause” in the central bank’s rate hike plans this year. This contrasted with market interpretations of earlier comments that there may be a more significant delay in Fed tightening this year as it looks to shrink its balance sheet.
On Friday, data showed that U.S. employers added about 98,000 jobs in March, the fewest since last May and well below economists’ expectation of 180,000, as bad weather hit construction hiring. “Wall Street indexes posted only minor drops after the jobs report and it seems that the U.S. market downplayed the results, and that’s helping sentiment in Japanese equities,” said Masaru Hamasaki, head of market and investment information department at Amundi Japan.
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The dollar rose 0.3 percent to 111.43 yen, lifting exporters, with Nissan Motor Co rising 1.2 percent, TDK Corp adding 1.5 percent and Tokyo Electron Ltd gaining 1.5 percent.
That said, Hamasaki added that going forward, investors will likely stay cautious against geopolitical risks after top aides to U.S. President Donald Trump differed on Sunday on where U.S. policy on Syria was headed after last week’s attack on a Syrian air base. Meanwhile, U.S. Secretary of State Rex Tillerson warned the strikes were a warning to other nations, including North Korea.
“There is growing uncertainty over what the U.S. would do with North Korea if the country stays consistent to its (Tillerson’s) message,” Hamasaki said.
On Monday, Japanese financial companies which seek high-yielding investment products outperformed. Mitsubishi UFJ Financial Group advanced 1.0 percent and Sompo Holdings surged 1.2 percent. Meanwhile, Takashimaya Co soared to more than a one-week high after the department store operator said it expects that its operating profit for the year ending February 2018 to rise 2.9 percent on year to 35 billion yen, exceeding 34.5 billion yen estimated by seven analysts polled by Thomson Reuters Starmine.
The broader Topix gained 0.6 percent to 1,498.00 and the JPX-Nikkei Index 400 advanced 0.6 percent to 13,423.72.By Ayai Tomisawa (Editing by Sam Holmes)
By Ayai Tomisawa (Editing by Sam Holmes)