Tokyo stocks surge on weaker yen as solid U.S. employment data dampens rate cut expectations

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10th June 2024 – (Tokyo) Tokyo’s stock market witnessed a surge in optimism on Monday, propelled by export-related companies capitalizing on a weaker yen after solid U.S. employment data tempered expectations of an imminent interest rate cut. The Nikkei Stock Average, Japan’s benchmark index, closed the day with a remarkable gain of 354.23 points, or 0.92 per cent, reaching 39,038.16. Simultaneously, the broader Topix index climbed higher by 27.46 points, or 1.00 per cent, concluding at 2,782.49.

Market analysts attributed the yen’s depreciation to the US dollar’s ascent to the lower 157-yen range in Tokyo. This upward trend emerged as the Federal Reserve signalled a likelihood of maintaining elevated interest rates for a longer duration due to the release of better-than-expected U.S. jobs data for May. Consequently, investors capitalized on this development by showing a keen interest in automakers and other export-oriented companies poised to benefit from the yen’s weakened value.

Within the Prime Market, the highest-tier segment of the Tokyo Stock Exchange, notable gains were observed among insurance firms, oil and coal product companies, as well as warehousing and harbour transportation service providers. These sectors emerged as the primary drivers of market growth, attracting investors seeking profitable opportunities in alignment with the evolving market dynamics.