Shares of Japanese automakers and microchip makers surged on Thursday, benefiting from the yen falling against the greenback to a 24-year low.
Higher-than-expected US inflation and fears of further Fed interest rate hikes led the yen to fall to 138 to the dollar on Thursday morning. These factors helped the Nikkei gain 0.62% at the close of the afternoon session.
It had opened down 0.63% in the morning after overnight CPI data showed US inflation topped 9% in June, but quickly regained ground once the yen rallied. hit 138 to the dollar for the first time since 1998.
“It’s possible the market has set a CPI high, or it thinks it’s the peak,” said Nomura Securities strategist Maki Sawada.
The broader Topix gained 0.23%.
US stocks fell overnight, but all three major indexes managed to limit their losses after falling on the release of CPI data. “There’s a sense of relief that stocks haven’t crashed,” said a market participant at a national securities firm.
Semiconductor and electrical component companies led the Nikkei, following overnight gains by the Philadelphia SE Semiconductor Index. Keyence Corp. added 3.48%, while Tokyo Electron Ltd added 3.33% and Fujikura Ltd rose 2.18%.
Suzuki Motor Corp gained 3.2% after announcing last night that it would end its involvement in MotoGP to focus its resources on sustainability.
Automaker Mazda Motor Corp rose 2.2%.
Uniqlo’s parent company, Fast Retailing, one of Nikkei’s most influential components, rose 1.5% ahead of the release of third-quarter results today. The company was expected to post quarterly earnings growth of 11%.
Utilities weighed heavily on the index, down 2.12% overall.
Tokyo Electric Power Company Holdings was the worst performer, falling 7.7%. The Tokyo District Court on Wednesday ordered four former executives to pay 13 trillion yen ($94 billion) in damages in a lawsuit filed by shareholders over the company’s handling of the Fukushima nuclear disaster.
Kansai Electric Power and Chubu Electric Power also posted losses and were down 2.35% and 1.3% respectively.
- Reuters, with additional editing by Alfie Habershon