– Japan‘s benchmark Nikkei stock index closed higher on Tuesday as the weak yen against the US dollar gave exporters a boost, while investors returned to buying oversold issues to cover short positions ahead of the national holiday on Wednesday.
The Nikkei Stock Average of 225 issues gained 170.95 points, or 0.61 percent, since Monday to close the day at 28,115.74.
Meanwhile, the broader Topix index added 22.18 points, or 1.12 percent, to end at 1,994.75.
Market analysts said that amid the lack of meaningful signals other than the yen’s slide against the US dollar, coupled with woes from exporters that found favour, investors opted to buy back issues at favorable valuations.
“There were no specific signs of market movement, but investors liked the weak yen. Investors are likely to buy back shares to cover their short positions before the market holiday tomorrow, as the yen could weaken further after Federal Reserve comments,” Yutaka Miura, a senior technical analyst at Mizuho Securities Co., said.
“But US stocks could fall if markets encounter any aggressive comments from Fed officials, which could trigger a sell-off in Japanese futures on Friday,” Miura said.
Possible hawkish comments could come from the latest Fed meeting, the minutes of which will be released this week, local analysts said.
As for further weakening of the yen, currency strategists said this could be the case ahead of the national holidays in both Japan and the United States.
“The dollar could rally further to the 143 yen level before the national holiday in Japan on Wednesday and the Thanksgiving holiday in the United States this week,” Yukio Ishizuki, senior currency strategist at Daiwa Securities Co., was quoted as saying. .
In the Prime Market, issues related to electricity and gas, pharmaceuticals and transportation equipment were the ones that gained the most.
Exporters gained from the yen’s decline as foreign earnings rise when repatriated and price competitiveness improved on global markets, investment analysts said.
Among these, automakers advanced, with Toyota Motor accelerating 2.3 percent, while Mazda Motor finished 1.2 percent higher.
Shionogi & Co. rose 2.8 percent, following reports that Japan’s Health Ministry may soon approve the pharmaceutical company’s new oral COVID-19 treatment.
Chipmakers ended mixed, with Nikkei heavyweight Tokyo Electron recovering to close 0.1 percent higher, while heavyweight Advantest fell 1.4 percent.
Issues that rose outpaced those that fell by 1,467 to 325 on the Prime Market, while 44 ended the day unchanged.
On Tuesday, 1,204.28 million shares changed hands, down from Monday’s volume of 965.30 million shares.
The turnover for the second trading day of the week came in at 2,923.180 million yen (20.690 million US dollars). ■