Tokyo, 8 September, /AJMEDIA/
The yen hovered mostly in the lower 144 zone against the U.S. dollar on Thursday morning in Tokyo as market participants waited to confirm Federal Reserve Chairman Jerome Powell’s stance on interest rate hikes at an event later in the day.
Tokyo stocks rose, with the Nikkei index rebounding sharply after ending at its lowest level in a month and half on Wednesday, as investor sentiment was improved by overnight U.S. share gains.
The 225-issue Nikkei Stock Average advanced 561.95 points, or 2.05 percent, from Wednesday to 27,992.25. The broader Topix index was up 37.35 points, or 1.95 percent, at 1,953.00.
On the top-tier Prime Market, gainers were led by air transportation, pharmaceutical, and electric appliance issues.
The Japanese currency moved little after briefly depreciating to 24-year lows near the 145 yen line during London and New York trading on Wednesday, following a Wall Street Journal report saying the Fed is likely to implement a 0.75 percentage point rate hike later this month, dealers said.
But investors took a breather in Tokyo and “sold the dollar (modestly) to lock in gains as the Japanese unit fell around 5 yen this week,” said Takuya Kanda, senior researcher at the Gaitame.com Research Institute.
Market participants mostly refrained from further dollar buying as they awaited Powell’s remarks at a monetary conference later Thursday to confirm whether his position has changed since he delivered a speech at a forum in Jackson Hole, Wyoming, in late August.
“Investors want to see if his stance that the Fed will continue to hike rates despite the cost to the U.S. economy is still intact,” Kanda said, adding “any dovish remarks, however, will likely spur yen buying.”
Higher borrowing costs in the United States would widen the interest rate gap with Japan.
A wait-and-see mood prevailed in the currency market as the European Central Bank is set to implement an interest rate increase later in the day.
At noon, the dollar fetched 144.19-22 yen compared with 143.72-82 yen in New York and 143.89-91 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $0.9986-9990 and 143.99-144.08 yen against $1.0003-0013 and 143.86-96 yen in New York and $0.9923-9925 and 142.79-83 yen in Tokyo late Wednesday afternoon.
Japanese shares rose, supported by buying in technology shares after the tech-heavy U.S. Nasdaq index rose overnight for the first time in eight trading days.
Semiconductor equipment maker Tokyo Electron gained 980 yen, or 2.4 percent, to 42,530 yen and chipmaker Screen Holdings climbed 190 yen, or 2.1 percent, to 9,180 yen.
The Tokyo market was also supported by firm airline issues on hopes for a rebound in travel demand after Japan increased its daily entry cap on arrivals from 20,000 to 50,000 on Wednesday.
Japan Airlines surged 99 yen, or 4.0 percent, to 2,571 yen, while ANA Holdings, the parent company of All Nippon Airways, was up 78.0 yen, or 3.0 percent, at 2,674.0 yen.
The weak yen also boosted some exporters, such as automakers, on hopes for an increase in their overseas earnings.
Among Prime Market issues, advancers outnumbered decliners 1,728 to 83, while 26 ended the morning unchanged.
