Japan’s Nikkei share average rebounded on Wednesday as investors seized opportunities following sharp declines in the previous session. Despite lingering concerns over US tariffs and their potential ramifications on global markets, strategic share buy-backs and easing geopolitical tensions helped stabilise sentiment.
The Nikkei fluctuated throughout the morning session before climbing 0.3% to 36,898.83 by midday, while the broader Topix index gained 0.9% to 2,695.86. Analysts pointed to renewed investor confidence after the Nikkei touched a six-month low on Tuesday. Reports that Ukraine may accept a US-backed ceasefire proposal with Russia contributed to a more optimistic trading atmosphere.
Japan’s financial sector outperformed as government bond yields climbed. Investors reacted positively to expectations of significant wage hikes from some of Japan’s largest corporations following negotiations with labour unions. This development bolstered speculation that the Bank of Japan may push forward with further interest rate hikes, driving gains in banking and insurance stocks, which advanced 2.7% and 2.2%, respectively.
However, caution prevailed ahead of a key US inflation report set for release later in the day. Persistent concerns over the strength of the US economy, exacerbated by shifting tariff policies under President Trump, weighed on overall market sentiment. Some investors fear that the US economy may be edging towards a recession, which could have broader implications for Japan’s export-driven market.
Year-to-date, the Nikkei has declined by 7.8%, reflecting ongoing volatility. Among major stocks, Advantest dropped 2.3%, SoftBank Group slipped 0.6%, Tokyo Electron edged up 0.7%, and Sony Group surged 4.5%. Meanwhile, Nissan Motor gained 0.9% following the announcement of company veteran Ivan Espinosa as its next chief executive, signalling stability for the automaker’s leadership.
Japan’s financial markets remain sensitive to global economic shifts, but resilient corporate strategies and evolving monetary policies may shape the path to recovery in the months ahead.
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