Japan’s Nikkei share average climbed on Monday, reaching the 39,000 level for the first time since late July. This rise was supported by a weaker yen and gains on Wall Street from the end of last week. By the midday break, the Nikkei was up 0.2% at 38,709.88, having earlier touched a high of 39,080.64 before profit-taking set in as the yen’s decline paused. Meanwhile, the broader Topix index remained flat at 2,712.56.
The positive momentum in Japan’s market was partly due to Wall Street’s performance on Friday, where stocks rose following new economic data that led to expectations of a modest interest rate cut by the U.S. Federal Reserve in September. With U.S. markets closed on Monday due to a public holiday, the dollar strengthened against the yen, benefiting Japanese exporters by increasing the value of their overseas profits when converted back to yen.
Several major Japanese companies saw gains, with Fast Retailing, the parent company of Uniqlo, rising by 0.5%. Toyota Motor increased by 0.9%, Honda Motor by 1.6%, and Mazda by 0.8%. The transport equipment sector led the market in early trading, ending the morning session up by 0.8%.
Global markets had fallen sharply early last month over concerns about a potential recession in the United States, but recent economic data has eased these fears, boosting hopes for a soft landing. However, investors remain cautious, particularly with key U.S. labour data due later this week. Some market participants still worry about the possibility of a hard landing, which could prevent the Nikkei from sustaining levels above 39,000 points. The direction of the yen will also be closely watched.
Among the top performers on the Nikkei, IHI Corp rose by 4.5%, followed by Kawasaki Heavy Industries, which gained 3.8%, and Advantest Corp, up 3.2%.
JPMorgan Japan Small Cap Growth & Income (LONJSGI), targets Japan income without compromising on Japanese growth opportunities. This Japan income investing opportunity gives investors access to a diverse and fast growing sector managed by local managers.
