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Japan's Nikkei ends higher in bargain buying as yen weakens

Reuters · 01/06/2023 01:52
Japan's Nikkei ends higher in bargain buying as yen weakens

- Japan's Nikkei share average reversed early losses to end higher on Friday, as investors bought back beaten-down stocks with the yen weakening against the dollar.

The Nikkei .N225 rose 0.59% to close at 25,973.85, after opening lower following Wall Street's weak finish overnight. The index lost 0.46% for the holiday-shortened week.

Wall Street's main indexes lost more than 1%, with the Nasdaq leading the declines, as evidence of a tight labour market eroded hopes that the Federal Reserve could pause its rate hike cycle anytime soon as it stays focused on taming inflation. .N

The broader Topix .TOPX rose 0.37% to 1,875.76 and lost 0.84% for the week.

"The yen's gain against the dollar since the Bank of Japan's policy tweak weighed on investor sentiment but the trend changed yesterday," said Chihiro Ohta, assistant general manager of investment research and investor services at SMBC Nikko Securities.

"Some investors bought back shares as some of those stocks looked cheap amid the yen's decline."

Nikkei's heavyweights lifted the index, with chip-making equipment maker Tokyo Electron 8035.T rising 3.51% and technology investor SoftBank Group 9984.T climbing 1.24%. Drugmaker Daiichi Sankyo 4568.T climbed 3.51%.

Sony Group 6758.T rose 2.41% and Honda Motor 7267.T gained 1.93% after the chairman of Sony Honda Mobility said their year-old electric-vehicle joint venture is in early discussions about a potential stock offering to raise cash.

Shipping firms .ISHIP.T jumped 3.27% to become the best performer among the 33 industry sub-indxes on the Tokyo Stock Exchange. Energy explorers .ISHIP.T rose 2.42%.

Fast Retailing 9983.T, the owner of Uniqlo clothing brand, lost 0.15%.

The property sector .IRLTY.T fell 1.18% and was the worst performer among the industry groups.

(Reporting by Junko Fujita; Editing by Nivedita Bhattacharjee and Vinay Dwivedi)