Japan's Nikkei rises as investors step in after two-day drop

TDK

28/11/2024 03:29

TOKYO, Nov 28 (Reuters) - Japan's Nikkei share average
erased early losses to trade higher on Thursday after two
straight sessions of losses made stocks relatively cheaper. 
    The Nikkei  .N225  was 0.42% higher at 38,295.13 by the
midday break, after falling as much as 0.87% earlier in the
session. 
    The broader Topix  .TOPX  was up 0.55% at 2,679.96.
    "We saw little market-moving cues today, but investors
wanted to buy back cheap stocks. Even shares in Toyota rose
despite a stronger yen," said Seiichi Suzuki, chief equity
market analyst at Tokai Tokyo Intelligence Laboratory.
    "Japanese stocks are cheap relative to U.S. stocks."
    Toyota shares, which fell 3.5% for the week, rose 0.72%.
Peer Honda Motor  7267.T  gained 0.85%.
    Chip-making equipment maker Tokyo Electron  8035.T  jumped
6.45% to become the biggest boost on the Nikkei. 
    Wall Street's main indexes closed lower on Wednesday, with
the Nasdaq leading the declines, as technology stocks slumped on
worries that the Federal Reserve might be cautious about rate
cuts after stubbornly strong U.S. inflation data.  .N 
    The yen has rallied sharply for two days, rising through its
200-day moving average to 151.50 per dollar  JPY=EBS .  FRX/ 
    A stronger Japanese currency tends to hurt the shares of
exporters, as it decreases the value of overseas profits in yen
terms when firms repatriate them to Japan.
    The yen's strength drove expectations that the Bank of Japan
might not raise its policy rate at its December meeting, which
was positive for local equities, said Suzuki.
     Just over half of the economists surveyed in a Reuters poll
expected the BOJ to raise interest rates again next month as a
strengthening economy and concerns over the depreciating yen
prompt policymakers to act. 
    Overnight index swaps (OIS) indicated a 56% chance of the
BOJ raising rates to 0.5% in December, as of 0205 GMT.
 0#JPYIRPR 
    Staffing agency Recruit Holdings  6098.T  fell 1.65%,
weighing on the Nikkei the most. 

 (Reporting by Junko Fujita; Editing by Abinaya Vijayaraghavan)
 ((junko.fujita@thomsonreuters.com;))