Japan’s Nikkei share average experienced an uptick on Tuesday, supported by the previous night’s advancements on Wall Street and a decrease in crude oil prices. The advance in Japanese stocks accelerated in the afternoon session following robust demand at a closely monitored auction of 10-year Japanese government bonds, which alleviated concerns regarding the debt market. The Nikkei concluded the trading session with a gain of 1.1%, reaching 70,683.98, while the broader Topix experienced an increase of 0.9%, closing at 4,183.56.
Among the components of the Nikkei 225, 165 experienced an increase, while 55 saw a decline, and 5 remained unchanged. The 10-year JGB auction experienced the strongest demand since May, resulting in a decline in bond yields from their earlier peaks. Concerns regarding Prime Minister Sanae Takaichi’s expansionary fiscal policies, coupled with a selloff in French sovereign debt, have resulted in bond yields reaching multi-decade highs this month. “The auction results were very good, and confirmed demand among investors,” said Masahiro Ichikawa.
That offered some comfort that yields will not persistently rise, jeopardising the stock market, he stated. Overnight, all three of the primary US indexes experienced an increase, with the tech-centric Nasdaq Composite achieving a record high, propelled by a surge in major technology players such as Nvidia. Japanese tech shares exhibited a varied performance, with chip-equipment manufacturer Advantest increasing by 3.9% and cable producer Fujikura rising by 5.2%, positioning them among the most significant gainers on the Nikkei. Conversely, AI-centric startup investor SoftBank Group experienced a decline of 3.1%, marking it as the index’s poorest performer.
“For individual stocks, perceptions of whether they are overvalued or undervalued are being assessed in relation to their current share price levels,” said Wataru Akiyama. More broadly though, “the fall in crude oil prices is clearly having an effect,” he said. Japan exhibits a significant reliance on energy imports, with a notable emphasis on supplies from the Middle East.
