Nikkei 225 Trades Near Levels Seen Before BOJ’s July Rate Hike
(Bloomberg) -- Japan’s Nikkei 225 Stock Average was near levels seen before the market tumbled on the Bank of Japan’s interest-rate hike at the end of July.
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The blue-chip gauge climbed to as high as 39,297.59 in morning trading, surpassing its close on July 31, the day the central bank hiked its policy rate to around 0.25% and unveiled plans to halve bond purchases. Combined with concern about the US economy, the Nikkei 225 tumbled as much as 20% within a week of the BOJ’s July move, diving deeper into a bear market.
The measure pared gains to trade little changed ahead of results for the ruling party’s leadership election, which will determine the nation’s next prime minister. The broader Topix index fell 0.7% as more than 1,100 companies traded without rights to the next dividend, shaving about 25 points off the benchmark.
Tech companies such as Tokyo Electron Ltd. and Fanuc Corp. climbed as the yen weakened 0.3% to 145.20 against the dollar. Firms with China exposure, such as Yaskawa Electric Corp. and Fanuc were among top performers after China’s top leaders ramped up efforts to revive growth.
Banks took a different tack, falling along with long-term bond yields amid speculation Sanae Takaichi may win Friday’s LDP election. Takaichi, who has argued that the economy still needs aggressive pump priming, would become Japan’s first woman prime minister if she wins.
Easing concerns over a tighter monetary policy has the Nikkei 225 on track for a three-week rally of about 7%. On Tuesday, Governor Kazuo Ueda reinforced his message that while the central bank will raise its key interest rate again if data allow, it won’t be in a hurry to do so
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