Japan's Nikkei climbs as oil prices ease, Fed decision reassures
TOKYO: Japan’s Nikkei share average climbed on Thursday as investors snapped up beaten-down gaming and pharmaceutical stocks, while sentiment was supported by lower crude oil prices and a largely expected policy decision from the US Federal Reserve. The Nikkei rose 0.2% by 0157 GMT after climbing as much as 1% earlier in the session. The broader Topix gained 0.6%. Overnight, Brent crude dropped…
Japan's Nikkei share average experienced an uptick on Thursday due to investors purchasing undervalued gaming and pharmaceutical stocks. Sentiment was bolstered by reduced crude oil prices and the expectation of a steady decision from the US Federal Reserve. The Nikkei increased by 0.2% by 0157 GMT, following a peak of 1% earlier in the day. The broader Topix also rose by 0.6%.
Brent crude oil prices dropped by 2.6% after news that Saudi Arabia would provide extra crude cargoes via Oman, easing concerns over supply disruptions in the Middle East. The US Federal Reserve increased its key interest rate by a quarter point, as anticipated, and hinted at possible further hikes this year.
Wataru Akiyama, an equities strategist at Nomura Securities, attributed the rise in stocks to the alleviation of market uncertainties. However, he noted that the Japanese stock market remains not particularly strong. Interest rate-sensitive tech stocks are trading cautiously, anticipating the Bank of Japan's policy decision on Friday and expecting a potential slowdown in AI development, which is currently priced into the market. The Bank of Japan is expected to raise rates by 0.25%.
Chip-sector giants Advantest and Tokyo Electron were the main losers in the Nikkei, dropping 1.9% and 2.2%, respectively. Nonetheless, AI-related stocks, such as SoftBank Group, which rose 1%, and cable maker Fujikura, which gained 0.6%, defied the trend. Investors also shifted into gaming and pharmaceutical shares, which have lagged behind the broader market, pushing Nintendo up by 3.8% and Konami by 3.7%.
Sumitomo Pharma shares increased by 4.5%, while oil-related stocks followed the decline of crude prices, with Inpex decreasing by 3.3%.
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