Robust Gain in Japan's Stock Market
In a noteworthy development for the Japanese stock market, technology stocks experienced significant gains on Monday, propelled by positive spillover from U.S. tech stock performances and optimistic interest rate expectations. The U.S. Nasdaq Composite reached a record high, driven by expectations of interest rate cuts and strong buying in major tech companies like Nvidia, which influenced Japanese tech stocks such as Tokyo Electron and Advantest to rally.
The combination of a favorable global tech market environment and currency trends, specifically a pause in the yen's appreciation, has helped underpin the tech rally within the Nikkei 225. Technology heavyweights Advantest and Tokyo Electron surged 3.5 percent each, while Screen Holdings gained more than 2 percent. Other notable gains include Sumco, Disco, Mercari, Lasertec, and Tokyo Electric Power, each advancing over 3 percent.
However, the overall market movement has been somewhat moderate due to concerns about U.S.-Japan tariff negotiations, fiscal issues in the UK, and rising domestic long-term interest rates, which have restrained broader market enthusiasm. Despite these concerns, the Nikkei 225 Index has been on an upward trend, gaining for the past four sessions. As of Monday, the Nikkei 225 Index is currently trading at 40,817.44, up 1.66 percent.
In other news, the Dow Jones Industrial Average rose 1.0 percent to 43,819.27, the S&P 500 Index climbed 0.5 percent to 6,173.07, and the Nasdaq Composite Index added 0.5 percent to 20,273.46. Crude oil prices rose on Friday due to the U.S. confirming readiness to sign trade deals with China and multiple other trading partners, as well as indications of strong summer demand. West Texas Intermediate crude for August delivery rose $0.28 to settle at $65.52 per barrel.
Notable gains were also seen in SoftBank Group, Olympus, and Fast Retailing (Uniqlo operator), which surged almost 6 percent, more than 6 percent, and more than 1 percent respectively. In contrast, Toyota edged down 0.2 percent. Toho, Orix, Daiichi Sankyo, and Yokohama Rubber also rose almost 3 percent each.
Industrial production in Japan increased by 0.5 percent on a seasonally adjusted basis in May, but missed forecasts for a 3.4 percent increase. The METI maintained its assessment of industrial production, stating that it continues to fluctuate indecisively.
The U.S. dollar is trading in the mid-144 yen-range on Monday, and stocks on Wall Street showed considerable volatility on Friday, with the S&P 500 and the Nasdaq ending the day at new record closing highs. The French CAC 40 Index, the German DAX Index, and the U.K.'s FTSE 100 Index all moved to the upside on the day.
It is worth noting that there are no other major losers in the Japanese stock market at present. The positive momentum in the technology sector is expected to continue as long as the favourable global tech market environment and currency trends persist.
Technology stocks in Japan continued to rally, with heavyweights such as Advantest, Tokyo Electron, and Screen Holdings surging, due to a favorable global tech market environment and currency trends, specifically a pause in the yen's appreciation. The overall market movement has been somewhat moderate due to various concerns, but the Nikkei 225 Index has been on an upward trend, with technology sector gains contributing to its four consecutive session gains.
