Thursday, 28th March 2024
To guardian.ng
Search
Breaking News:

Tokyo extends rally after solid US growth forecast

By AFP
02 November 2017   |   9:38 am
Tokyo's stock market was the Asian standout Thursday, building on a rally and buoyed by a strong US growth forecast and domestic corporate results as well as a weak yen.

Pedestrians stand in front of an electronics stocks indicator displaying share prices of the Tokyo Stock Exchange in Tokyo on October 25, 2017. Tokyo stocks opened higher on October 25, with the benchmark index extending the longest winning streak in its nearly 70-year history as Japan kicked off its latest corporate earnings season. / AFP PHOTO / Kazuhiro NOGI

Tokyo’s stock market was the Asian standout Thursday, building on a rally and buoyed by a strong US growth forecast and domestic corporate results as well as a weak yen.

Shares on the Nikkei 225 index added 0.5 percent to hit a fresh 21-year high, brushing aside concerns about overheating following their recent surge.

Investor sentiment was boosted by the US central bank’s punchy assessment of “solid” economic growth while keeping its key policy interest rate unchanged.

Honda led the surge in Japanese equities, jumping more than five percent after it raised its annual profit outlook on strong motorcycle sales.

Sony shares added another 2.8 percent as the firm raised profit forecasts and announced plans to revive its robot pet dog.

The weak yen — a positive factor for Japanese exporters — was also behind the gains, brokers said.

But trading was muted elsewhere in Asia, as traders braced for a series of key economic announcements.

Investors were looking to the imminent US House Republicans’ tax reform announcement, confirmation of President Donald Trump’s pick for the new Federal Reserve chair, and an important Bank of England meeting.

Hong Kong slipped 0.3 percent while Shanghai shed 0.4 percent, amid caution stemming from an increase in Chinese bond yields.

Seoul and Singapore were also down by 0.4 percent.

At the open London, Paris and Frankfurt were all fractionally down.

The Bank of England is expected Thursday to deliver its first interest rate increase in more than a decade as it fends off Brexit-induced high inflation.

– Alibaba, Apple earnings –
Chinese internet giant Alibaba was due to release its third quarter earnings after Asian markets closed Thursday, with investors watching closely to see if heavy investment has yielded further rapid revenue growth.

Meanwhile on Wall Street, the world’s biggest company Apple was also due to release earnings Thursday.

The Fed, as expected, kept interest rates unchanged as it reported the US was growing at a “solid pace”. That statement solidified the view the US central bank is likely to raise interest rates in December.

The dollar strengthened on those developments Wednesday, lending support to Asian exports, although some of those gains were pared Thursday amid uncertainty about the prospects of US tax cuts.

Wall Street remained hopeful that Trump’s ambitious tax plans — due to be unveiled by House Republicans Thursday — are moving closer to becoming reality, but a delay in the roll-out signalled potential trouble ahead.

The US central bank will remain in focus on Thursday with Trump’s announcement of his choice to lead the Federal Reserve.

The White House notified current Fed Governor Jerome Powell on Wednesday that he will be the nominee, replacing current Fed Chair Janet Yellen, according to a congressional source and US media.

Reports of Powell’s expected nomination “will support Japanese shares”, Okasan Online Securities said in a commentary, noting Powell is seen as holding a policy position close to current chair Janet Yellen.

– Key figures around 0830 GMT –
Tokyo – Nikkei 225: UP 0.5 percent at 22,539.12 (close)

Hong Kong – Hang Seng: DOWN 0.3 percent at 28,518.64 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,383.31 (close)

Euro/dollar: UP at $1.1639 from $1.1625 at 2100 GMT

Pound/dollar: UP at $1.3260 from $1.3252

Dollar/yen: UP at 114.08 yen from 114.07 yen

Oil – West Texas Intermediate: DOWN 17 cents at $54.13 per barrel

Oil – Brent North Sea: UP 88 cents at $61.37 per barrel

New York – DOW: UP 0.3 percent at 23,435.01 (close)

London – FTSE 100: FLAT at 7,486.44

In this article

0 Comments