Japan's Nikkei share gauge rallies as bond market jitters subside

Tokyo - The Nikkei share average surged on Thursday as US measures to stabilize its bond market boosted investor confidence and demand for riskier assets. The benchmark Nikkei 225 rose 1% to 65,982.49 at midday, while the Topix increased 0.91% to 4,048.72.

Concerns about soaring government debt and inflation had driven long-term borrowing costs from the US to Japan to their highest levels in decades earlier in the week. However, the US Treasury's decision to double buyback sizes for long-duration debt overnight led to a significant drop in US yields, which in turn impacted Japan's markets.

Wataru Akiyama, an equities strategist at Nomura Securities, attributed the market's positive movement to the decline in interest rates. It was particularly encouraging to see sectors that had previously been lagging behind AI and semiconductor-related stocks now experiencing notable gains.

The breadth of the rally was overwhelmingly positive, with 175 stocks advancing on the Nikkei 225 compared to 48 declining and two remaining unchanged. Among the largest percentage gainers were Sumitomo Metal Mining, up 9.72%, followed by Sumitomo Pharma at 8.70%, and Kansai Electric Power, which rose 8.09%, marking its biggest one-day gain since August 2024.

On the downside, Rohm fell by 3.88%, Ibiden dropped 3.40%, and Sumco declined 3.18%.