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Tokyo stocks open higher, extending US rallies on Powell speech

Nov 29 2018 08:10
AFP

Tokyo - Tokyo stocks opened higher on Thursday, extending rallies on Wall Street that toasted a speech by Federal Reserve Chair Jerome Powell hinting at a slower pace of rate hikes.

The benchmark Nikkei 225 index, which has closed higher for the past four days, added 0.88% or 195.08 points to 22 372.10 in early trade while the broader Topix index was up 0.85% or 14.06 points at 1 667.72.

"Japanese shares are seen rising, encouraged by rallies in US shares," Toshiyuki Kanayama, senior market analyst, said in a commentary.

"Investors will probably test the Nikkei index's 22 500 level" that is psychologically important, he added.

Powell, in remarks to the New York Economic Club, charted a middle ground, saying rates were still historically low but only "just below" the estimate of neutral - a rate that neither stimulates nor restrains the economy.

"This was a material change from his view in October when he noted that 'we may go past neutral, but we're a long way from neutral at this point, probably,'" Rodrigo Catril, senior strategist at National Australia Bank, said in a note.

"Powell's remarks elicited a risk positive market reaction as they appear to suggest a softening in his stance in terms of what might be the future pace of policy tightening," he said.

The dollar fetched ¥113.57 in early Asian trade, against ¥113.58 in New York and ¥113.86 in Tokyo late on Wednesday.

Turning to individual shares, Nintendo rallied 3.49% to ¥34 670 after it said its US sales from Thanksgiving on Cyber Monday were more than $250m thanks to brisk sales of its Switch hardware.

Nissan was up 1.23% at ¥983.5 after two days of losses and ahead of an expected three-way meeting that will discuss the future of Renault-Nissan-Mitsubishi alliance.

Mitsubishi Motors was up 0.28% at ¥692.

Maker of sensors and measuring instruments Keyence was up 1.36% at ¥62 600 while electronic parts maker Rohm was up 2.80% at ¥8 060.

On Wall Street, the dow ended up 2.5% at 25 366.43.

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