Tokyo shares experienced a positive end on Monday, bolstered by a cheaper yen against the dollar. This uptick came after declines on Wall Street and early losses for the key Nikkei index. The benchmark Nikkei 225 index rose by 0.54 percent, or 208.18 points, finishing at 38,804.65. Simultaneously, the broader Topix index increased by 0.57 percent, or 15.50 points, closing at 2,740.19.
In currency trading, the dollar was valued at 159.71 yen, compared to 159.90 yen in Tokyo’s early trading hours. During this period, the Japanese currency nearly reached a new three-decade low. IwaiCosmo Securities highlighted that the weaker yen boosted auto-linked shares like Toyota, which saw a broad rally.
While a cheaper yen benefits Japanese manufacturers by inflating their repatriated profits, it also raises the cost of imported goods, negatively impacting household spending. The yen’s latest decline has put traders on alert for potential intervention, especially after Japan’s finance ministry expended 9.79 trillion yen ($61 billion) to support the yen between April 26 and May 29.
Major shares in Tokyo reflected this trend. Toyota saw a significant increase of 2.47 percent, reaching 3,150 yen, while Honda climbed 1.68 percent to 1,688 yen. Sony Group also gained, rising 0.89 percent to 12,925 yen, and Uniqlo operator Fast Retailing edged up 0.27 percent to 40,460 yen.
Fidelity Japan Trust PLC (LON:FJV) aims to be the key investment of choice for those seeking Japanese companies exposure. The Trust has a ‘growth at reasonable price’ (GARP) investment style and approach – which involves identifying companies whose growth prospects are being under-appreciated or are not fully recognised by other investors.
