Japan's Nikkei pushes to fresh 34-year peak as chip shares climb

Ebara

15/02/2024 03:21

By Kevin Buckland
       TOKYO, Feb 15 (Reuters) - Japan's Nikkei share average
rallied to the highest level in 34 years on Thursday, as
chip-related shares tracked overnight gains on Wall Street
peers.
    The benchmark stock index was also supported by a weak
currency, which boosts the outlook for exporters, amid a
continued outlook for dovish monetary policy as Japan
unexpectedly slipped into a recession at the end of last year.
    The Nikkei  .N225  rose as high as 38,127.85 for the first
time since January 1990 - when the so-called "bubble economy"
was just starting to deflate - before entering the midday recess
at 37,948.35, up 0.65% from the previous close. 
    The Nikkei marked a record high of 38,957.44 on Dec. 29,
1989, the final trading day of that year.
    "I can't believe we'd come this far and not have a look at
those all-time highs," said Tony Sycamore, a markets analyst at
IG, flagging the potential for a test of the level by end-March.
    "Into the Japanese financial year-end, the Nikkei generally
does well," he said. "But if it misses out, then we'll have to
look towards the middle of the year," with the Nikkei tending to
retreat at the start of the new fiscal year in April, he added.
    On Thursday, chip-related shares provided the Nikkei with an
outsized lift, taking cues from a 2.2% jump in the Philadelphia
SE Semiconductor Index  .SOX  overnight, outpacing rallies for
the main three Wall Street benchmarks.
    Chip-making equipment giant Tokyo Electron  8035.T 
contributed the most: 133 index points with a nearly 4% jump.
Artificial intelligence-focused startup investor SoftBank Group
 9984.T  provided a 49-point boost with a 3% rise.
    Corporate earnings produced some outsized winners and
losers, with green energy company Ebara  6361.T  and e-commerce
company Rakuten Group  4755.T  each surging nearly 16%. Toy
company Bandai Namco  7832.T  tumbled more than 15%.
    The yen's slide below 150 per dollar  JPY=EBS  this week has
been broadly supportive, as it boosts the value of overseas
revenues and makes products more competitive.
    The Japanese currency has been weighed down by comments from
top Bank of Japan officials that even if negative short-term
interest rate policy is removed in coming months, further rate
hikes are likely to be slow. 
    The timing of any policy tightening was further complicated
on Thursday by the release of data showing the economy slipping
into a recession.
    "If we get a 10 basis point rate hike in April, that's not
going to change anything for the Nikkei," said IG's Sycamore.
    "When you look at the bigger picture, it all looks good."

    


 (Reporting by Kevin Buckland; Editing by Mrigank Dhaniwala)
 ((Kevin.Buckland@thomsonreuters.com;))