Nikkei 225 Soars to Fresh Record High, Yen Rebounds
In a significant surge, Japan's Nikkei 225 index reached a new all-time intraday high, following a positive lead from Wall Street where major indexes also set records. The Nikkei's rise was attributed to advances in semiconductor-related issues, transportation equipment, pulp and paper, and wholesale trade sectors. A weaker yen, which benefits exporters, contributed to the climb, with the Nikkei 225 rising 666.92 points, or 1.67%, from Tuesday to 40,670.52, and the broader Topix index also gaining 43.28 points to 2,794.25.
The rally in Japanese stocks coincided with a statement from the Federal Reserve indicating a potential for three interest rate cuts in 2024, which contrasted with the Bank of Japan's (BOJ) recent rate hike — its first since 2007. Despite this hike, BOJ Governor Kazuo Ueda has stated that the central bank's policy would remain generally supportive. As a result, short-term Japanese government bond yields have risen in anticipation of a tighter policy stance in the medium term, while long-term bond yields have decreased as investors seek opportunities at the fiscal year-end.
Meanwhile, the yen recovered from a four-month low against the dollar, which last traded down 0.5% at 150.505 yen after reaching 151.82 yen. Market players are closely monitoring the BOJ's moves, with expectations of another potential rate hike within the year.
