Japanese Shares Follow Wall Street Higher

The Nikkei 225 Index jumped 1.7% to above 69,400, while the broader Topix Index gained 0.5% to 4,196 on Friday, with Japanese shares extending their rally and following a strong lead from Wall Street as subdued US inflation data prompted traders to scale back expectations for a Federal Reserve rate hike in September. Markets are now pricing in around a 35% chance of a 25 basis point Fed rate hike in September, down from 55% a week earlier. Domestically, investors are speculating about a possible Bank of Japan rate hike in September or October amid concerns that a weak yen could add to inflationary pressures. Technology stocks led the gains, including Kioxia Holdings (5.2%), Advantest (5.1%) and SoftBank Group (5.5%). The Nikkei and Topix are on track to rise 6% and 3.5% for the week, respectively.

The Nikkei 225 Index went up by 915 points or 1.35 percent on Thursday to close at 68439 points. The rise was led by Murata Manufacturing (11.36%), Toppan (10.47%) and Taiyo Yuden (7.16%).

The Nikkei 225 Index rose 1.16% to close at 68,308 while the broader Topix Index climbed 0.89% to 4,176 on Thursday, with the latter hitting fresh record highs as subdued US inflation data eased pressure on the Federal Reserve to raise interest rates in the near term. Markets now see around a 40% chance of a 25 basis point rate hike from the Fed in September, down from nearly 50% a day earlier. In Japan, producer prices rose 7.2% in July, easing slightly from 7.3% in June and coming in below forecasts of 7.4%. Technology and artificial intelligence-related stocks led the advance, with strong gains for Kioxia Holdings (3.9%), Taiyo Yuden (6.5%), Advantest (4%), Ibiden Co (5.3%) and Murata Manufacturing (10.3%). Bank stocks also performed well, including Mitsubishi UFJ (2.9%), Sumitomo Mitsui (1.6%) and Mizuho Financial (3.2%).