Nikkei rallies 2% on softer yen, Japan leadership tussle in spotlight (updated)

Lasertec

27/09/2024 09:13

(Updates with details, new comments)
    By Brigid Riley
       TOKYO, Sept 27 (Reuters) - Japan's Nikkei share average
rallied more than 2% on Friday, buoyed by further softening of
the yen as markets closed just before results of the ruling
Liberal Democratic Party's leadership election were out.
    The Nikkei  .N225  ended 2.32% higher at 39,829.56, its
highest close since July 19, before the final results showed
former defence minister Shigeru Ishiba overtaking right-wing
economic security minister Sanae Takaichi in a runoff vote.
    The broader Topix  .TOPX  finished up 0.73% at 2,740.94.
    The market was reacting to Takaichi, an advocate of deceased
former premier Shinzo Abe's "Abenomics" stimulus policies and a
vocal opponent of further interest rate hikes in Japan, coming
in with the most votes in the first round, analysts said.
    Her policies would have implied a weaker yen and lower
yields, making it easy for share prices to rise.
    Shigeru Ishiba's win, however, will likely drag the market
down in the short term, analysts said.
        Ishiba, a critic of past monetary stimulus, told Reuters
that Japan's central bank is "on the right policy track" with
rate hikes thus far.
  
        While he is a seasoned politician with deep thoughts on
economic policy, Ishiba currently lacks a clear growth strategy,
said Naka Matsuzawa, chief macro strategist at Nomura.
        That might "work against the stock market" until his new
cabinet takes shape, although bank shares will likely get a
boost from his victory, he said.
  
    The yen  JPY=EBS  bounced, recovering from earlier losses,
on news of the Ishiba victory.  FRX/ 
        On Friday, Japanese chip-related stocks led the rally,
supported by overnight gains in their U.S. peers, with Tokyo
Electron  8035.T  climbing 6.66% to deliver the biggest boost to
Nikkei.
    Lasertec  6920.T  surged 8.19% and was the biggest
percentage gainer, while Advantest  6857.T  climbed 4.48%.
    Other major shares also made sizable gains, with Nikkei
heavyweight Fast Retailing  9983.T  adding 2.53%, SoftBank Group
 9984.T  rising 2.26% and Daikin Industries  6367.T  ending
6.28% higher.

 (Reporting by Brigid Riley; Editing by Eileen Soreng and Sumana
Nandy)
 ((brigid.riley@thomsonreuters.com;))