Japan's Nikkei ends higher on eased fears over U.S. financial crisis-Xinhua

Japan's Nikkei ends higher on eased fears over U.S. financial crisis

Source: Xinhua| 2023-03-22 17:51:45|Editor: huaxia

TOKYO, March 22 (Xinhua) -- Japan's Nikkei stock index closed higher Wednesday as financial stocks rallied on eased concerns over the U.S. banking crisis, although jitters remained ahead of the outcome of the U.S. Federal Reserve's policy meeting.

The 225-issue Nikkei Stock Average added 520.94 points, or 1.93 percent, from Monday to close the day at 27,466.61.

The broader Topix index, meanwhile, gained 33.63 points, or 1.74 percent, to finish at 1,962.93.

Brokers here said the Nikkei posted its biggest gain in more than two months having been battered down recently by the failure of two U.S. banks and the faltering of a prominent European bank leading to its acquisition, amid fears of a global financial crisis.

They added that fears eased somewhat Wednesday following U.S. Treasury Secretary Janet Yellen saying that deposits in the two collapsed banks would be protected.

She also said that should the contagion spread to other regional lenders leading to deposit runs, then the same measures would be taken to protect depositors.

Analysts here said that stocks had clawed their way back to a level prior to the collapse of Silicon Valley Bank in the United States, although investors remained wary over the stability of the global financial system, with the subsequent collapse of Signature Bank in the United States and Europe's Credit Suisse needing a state bailout before being bought by a rival lender, stoking concerns of further contagion.

Some strategists here sounded a slightly cautious note, with Maki Sawada, a strategist at Nomura Securities, saying that, "Worries about the financial sector have retreated one notch, and as a result the Japanese stock market is moving to retrace what it lost on Monday."

Investors were also keenly eyeing the result later in the day of the Fed's policy-setting meeting to see if the recent financial chaos would have a bearing on the U.S. central bank's interest rate hikes.

Market strategists here believe the Fed could opt to completely put the brakes on its aggressive monetary tightening policy owing to the current financial crisis, the worst since the Lehman Brothers crash in 2008 that triggered a global financial meltdown, or forge ahead with its rate hikes to keep battling chronic inflation.

Among financial issues recovering lost ground, Mitsubishi UFJ Financial Group climbed 3.1 percent, while Mizuho Financial Group jumped 2.3 percent.

Daiwa Securities and Nomura Holdings found favor after Yellen's remarks that the government would support smaller lenders if necessary, both gaining around 4.5 percent by the close.

Nikkei heavyweights also helped buoy the broader market, with startup investor SoftBank Group advancing 2.8 percent, while Uniqlo store operator Fast Retailing added 1.7 percent.

By the close of play, consumer credit, securities house and bank-oriented issues comprised those that gained the most.

The turnover on Wednesday came to 2,937.20 billion yen (22.17 billion U.S. dollars).

Markets here were closed on Tuesday for a national holiday.