Nikkei Soars on Tech Rally, Boosted by Weaker Yen
The Nikkei Stock Average surged 3.5% on Tuesday, led by a rally in tech shares. The benchmark index closed at 36,232.51, its highest level since August 2nd.
The rally was fueled by a weaker yen, which boosted sentiment among traders returning from a public holiday. The Japanese currency declined about 0.3% to 147.64 per dollar, extending its slide from overnight.
Chipmaking equipment giant Tokyo Electron led the Nikkei's gains, rising 6.2%. Chip-testing machine manufacturer Advantest followed closely, advancing 7.7%. Major exporters Sony Group and Toyota Motor also saw significant gains, rising 5% and 3.3% respectively, as the weaker yen inflated the value of their overseas sales.
The Nikkei's performance comes after a period of volatility. The index had slumped to a nine-month low of 31,156.12 on August 5th, following surprisingly weak U.S. monthly payrolls figures that sparked recession fears. However, U.S. macro data has improved since then, and the economic outlook will be closely watched this week with the release of key inflation and retail sales data.
"What's really in focus is whether we see a slowdown in U.S. consumption, or in the U.S. economy as a whole," said Maki Sawada, an equities strategist at Nomura Securities. "The reaction in foreign-exchange rates and in U.S. equities is going to have a huge effect on the Japanese stock market.