On Tuesday, the Japanese stock market rebounded as investors repurchased stocks after a sharp drop in the previous trading day, while major US technology stocks surged overnight, pushing Wall Street to new highs.
At the close, the Nikkei 225 index rose 1%, or 379.67 points, to 38,482.11 points. Previously, it fell nearly 2% on Monday and fell below the psychologically important level of 38,000 points for the first time this month. The broader TOPIX index rose 0.74% to 2,719.92 points. #JapaneseMarket#
Tokyo Electron, the chip manufacturing equipment manufacturer, rose 2.41%, providing the largest boost to the Nikkei index. Electronic parts manufacturer TDK also jumped 7.22%.
The pharmaceutical industry fell 0.95% and became the worst-performing industry among the 33 industry sub-indices of the Tokyo Stock Exchange.
In the constituent stocks of the Nikkei 225, 173 stocks rose, 51 fell, and 1 remained unchanged.
"Investors repurchased stocks because the previous day's decline was more than expected," said Seiichi Suzuki, chief stock market analyst at Tokai Tokyo Intelligence Laboratory. "There are currently no bullish news in the market that can further boost the index, nor is there any bearish news that can cause it to fall."
Strategists said that the uncertainty about the policy path of the Bank of Japan (BOJ) suppressed investor sentiment and limited the rise of the Nikkei index.
At the policy meeting on last Friday, the Bank of Japan stated that it will begin to reduce bond purchases and will announce detailed plans in July to reduce its nearly $5 trillion balance sheet.
"It is unclear how much BOJ will reduce the amount of bond purchases before the next policy meeting, and the market does not like uncertainty," Suzuki said.
The Bank of Japan maintains its short-term policy rate target range of 0-0.1%, meeting expectations.
"I don't think the Bank of Japan will raise interest rates next month because macro data is not enough to support rate hikes," said Naoki Fujiwara, senior general manager of Shin-Kong Asset Management.
The S&P 500 index rose above 5,470 points overnight, and large technology stocks such as Tesla and Apple pushed up. At the same time, the Nasdaq 100 index approached 20,000 points. Optimism about economic resilience and corporate earnings improvement dominates.
Traders are closely monitoring retail sales data and a series of speeches by Federal Reserve officials on the eve of the US holiday.
At the same time, Asian stocks generally rose, and investors welcomed the Australian central bank's decision to maintain interest rates.
In a report released on Tuesday, S&P Global Ratings emphasized the resilience and expansion readiness of major Japanese banks. Analyst Chizuru Tateno expects profits to improve in the 2024 fiscal year, thanks to stable profits, risk management and overseas investments.
According to reports, Japan is drafting guidelines to support its 9,000 medium-sized companies to help them grow and expand overseas. Global companies such as Citigroup are also increasing their efforts to provide services to these companies.