Roundup: Tokyo stocks close higher as yen's retreat boosts exporters, energy issues gain-Xinhua

Roundup: Tokyo stocks close higher as yen's retreat boosts exporters, energy issues gain

Source: Xinhua| 2022-05-06 16:29:16|Editor: huaxia

TOKYO, May 6 (Xinhua) -- Tokyo stocks closed higher Friday as exporters gained traction following the yen's retreat against the U.S. dollar, with energy shares propping up the market owing to an overnight rise in crude oil futures.

The 225-issue Nikkei Stock Average gained 185.03 points, or 0.69 percent, from Monday to close the day at 27,003.56.

The broader Topix index, meanwhile, added 17.56 points, or 0.93 percent, to finish at 1,915.91.

Markets here were closed from Tuesday to Thursday for the Golden Week string of national holidays.

Local dealers said that trading got off to a downbeat start as investor sentiment was dented by U.S. shares retreating overnight, with the Dow Jones Industrial Average ending at its lowest level in around two years.

They said that the U.S. Federal Reserve raising its key interest rates by half a percentage point earlier this week and Fed Chairman Jerome Powell suggesting that more half-point hikes were possible, while widely expected by market participants, triggered uncertainties about the Fed's future aggressive policy moves.

"While the interest rate hike announced following the Fed's two-day policy meeting on Wednesday was widely expected by investors, the market was weighed down by uncertainties over what the central bank will decide in its meetings in the coming months," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.

Market analysts have also pointed out that concern is mounting that while the Fed and other major central banks are raising rates to combat inflation, the Bank of Japan (BOJ) has maintained its ultra-loose monetary policy with prospects growing of a widening monetary policy gap between the Fed and the BOJ.

The BOJ's dovish moves of late have seen interest rates between Japan and the U.S. widen, which has triggered dollar buying and the yen's weakness to a recent run of 20-year lows versus the U.S. dollar, as well as caused volatility in the stock market here, analysts have said.

The BOJ has said it sees such volatility and inflation that U.S. and European central banks are reacting to as temporary, although Japan is dealing with similar inflationary pressures.

Core consumer prices in Tokyo increased at the fastest rate in more than seven years in April on year, jumping 1.9 percent owing to surging prices for crude oil and raw materials, the government said in a report on Friday.

Tokyo's CPI data serves as a barometer of the country's broader core consumer prices.

The latest jump in CPI is nearing the BOJ's inflation goal of 2 percent, although strategists here have pointed out that such a rapid rise in inflation in the longer term could hurt corporate earnings as well as household incomes, as inflation here is not in tune with a rise in wages or an increase in private demand.

Despite a lackluster start, buying picked up toward the end of the morning session with investors snapping up export-related issues owing to the yen's weakness, with energy stocks also being sought on the back of crude oil futures rising overnight, brokers here said.

But some investors opted to hit the sidelines in later play, dealers here said, ahead of the U.S. Labor Department releasing its key monthly employment report later in the day.

By the close of play, mining, transportation equipment and air transportation issues comprised those that gained the most, with rising issues outpacing falling ones by 1,279 to 510, while 49 ended the day unchanged.

Automakers were among exporters advancing on the yen's weakness, with Toyota Motor and Mitsubishi Motors accelerating 1.9 and 4.0 percent, respectively.

Energy issues finding favor included exploration giant Inpex climbing 4.9 percent, while refiner Eneos Holdings closed 2.6 percent higher.

Tokyo Electric Power Holdings was the Nikkei's biggest winner, surging 16 percent, following Japanese Prime Minister Fumio Kishida saying that Japan would become more reliant on nuclear energy.

On the Prime Market on Friday, 1,498.56 million shares changed hands, rising from Monday's volume of 1,194.20 million shares.

The turnover came to 3,435.91 billion yen (26.35 billion U.S. dollars).

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