Japan's Nikkei ends higher on U.S. debt ceiling deal, weak yen lifts exporters-Xinhua

Japan's Nikkei ends higher on U.S. debt ceiling deal, weak yen lifts exporters

Source: Xinhua| 2023-05-29 17:42:45|Editor: huaxia

TOKYO, May 29 (Xinhua) -- Japan's benchmark Nikkei stock index closed at a fresh 33-year high on Monday, as a deal on the U.S. debt ceiling and a weak yen lifted sentiment.

The 225-issue Nikkei Stock Average gained 317.23 points, or 1.03 percent, from Friday to close the day at 31,233.54, marking its highest closing level since July 26, 1990.

The broader Topix index, meanwhile, added 14.81 points, or 0.69 percent, to finish at 2,160.65.

Dealers here said the market mood was lifted early on following reports that a deal had been struck to raise the U.S. debt ceiling and avert an unprecedented default by the country, with the deal now needing to be passed by both chambers of the U.S. Congress.

They added that concerns over the default easing had helped settle global markets as fears over a default had been growing, with U.S. Treasury Secretary Janet Yellen saying the U.S. government will be unable to settle its debts on time if Congress does not raise the debt ceiling by June 5.

Analysts here also highlighted a continued policy divergence between the Bank of Japan and its dovish monetary policy stance and the likelihood that the U.S. Federal Reserve will continue with its hawkish policy to tame inflation at the expense of the economy.

They pointed to U.S. economic data showing persistent inflation in April and hence the likelihood of further rate hikes by the Fed.

Gains were trimmed in later trade, strategists here said, as investors refrained from making bold bets as markets in the United States are closed on Monday for a national holiday.

"But the benchmark index narrowed its gains in the afternoon, with a wait-and-see mood prevailing as U.S. markets are closed for Memorial Day on Monday," Tomoichiro Kubota, senior market analyst at Matsui Securities Co., was quoted as saying.

"Following the strong start this week, there is likely to be little movement in the Nikkei until U.S. markets reopen Tuesday," Kubota said.

High technology issues added to gains made late last week on the back of solid earnings and guidances from U.S. firms like Nvidia Corp.

As a result, chip-testing equipment maker Advantest advanced 4.1 percent, while Nikkei heavyweight SoftBank Group climbed 8.2 percent, following reports of a collaboration between SoftBank Corp. and Nvidia related to producing a generative AI platform and 5G/6G applications.

Export-oriented issues found favor on a weaker yen versus the U.S. dollar as their overseas profits stand to be boosted when repatriated, with automakers Subaru and Honda Motor accelerating 1.7 and 1.3 percent, respectively.

Mitsubishi Electric added 1.9 percent, while electronic components maker TDK ended 0.9 percent higher.

By the close of play, marine transportation, wholesale trade and bank-linked issues comprised those that gained the most.

The turnover on the Prime Market on the first trading day of the week came to 3,509.58 billion yen (24.99 billion U.S. dollars).

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