Nikkei Rises On Broad Buying Surge Following Wall Street Recovery

In today’s trading, Asian markets surged, following a Wall Street rally spurred by data indicating that US inflation continued to slow in June, raising hopes for an interest rate cut by the Federal Reserve. 

This positive sentiment sets the time for a busy week ahead. Key events include policy decisions from the US and Japanese central banks, a crucial US jobs report on Friday, and earnings releases from major corporations. 

Japan’s Nikkei 225 share average bounced back on Monday from a three-month low recorded in the previous session, as Wall Street’s strong finish at the end of last week lifted investor sentiment. 

The Nikkei ended the day 2.13% higher at 38, 468.63 in a broad-based rally, while the broader Topix went up by 2.23% to 2,759.67.

Today marks the Nikkei’s first day of gains in nine sessions. Last week, the index reached its lowest level since late April due to a surge in the yen and a decline in US technology stocks. 

Wall Street’s major in US technology shares has finally paused, which appears to be a positive factor for Japanese equities,” said Masahiro Ichikawa, chief market strategist at Sumimoto Mitsui DS Asset Management. 

All but 11 of the Nikke 225 constituents advanced, with prominent tech stocks surging and significantly boosting the overall index. 

Chip-related shares such as Tokyo Electron and Advantest rose 3.7% and 4.1% respectively, while AI-focused startup investor SoftBank Group climbed 2.3%.

All 33 industry sectors of the Tokyo Stock Exchange saw gains. 

The rally precedes the policy meetings of the Bank of Japan and the Federal Reserve on July 30-31. Ichikawa anticipates that it may be challenging for Nikkei to move significantly higher or lower as markets await the outcomes of these meetings. 

Meanwhile, elsewhere in Asia, the Hang Seng index went up 1.1% at 17,210.90, while the Shanghai Composite up by 0.2% closing at 2,897.67.