Economy 2 MIN READ

Japan’s Nikkei touches 2-week top on Wall Street boost

August 29, 2023By Reuters

 – Japan’s Nikkei share average advanced to a two-week high on Tuesday, buoyed by overnight gains in Wall Street, although nerves ahead of potentially pivotal US economic data this week limited the upside.

The Nikkei rose as much as 0.68% to 32,389.12 early in the session, its highest since Aug. 15. However, gains fizzled mid-day and the index ended 0.18% higher at 32,226.97.

The broader Topix added 0.16%.

Nomura Securities strategist Kazuo Kamitani said the 25-day moving average at around 32,276 is proving to be a firm barrier for further gains.

“It’s an environment where traders’ attention is easily drawn to the 25-day moving average,” he said, adding it was more likely that the Nikkei would stay below the level in the next couple of days.

Above 32,300 in particular, “the market feels quite heavy,” Kamitani added.

Wall Street’s three main indexes all gained 0.6% or more overnight. However, a data-heavy week culminating in monthly US payrolls figures on Friday has taken on added importance after Federal Reserve Chair Jerome Powell suggested rates could rise further.

Tokyo Electric Power Co. was the Nikkei’s top-performing stock by far, rallying 5.31%.

The utility has been releasing treated radioactive water into the Pacific Ocean, taking it into the final phase for decommissioning the wrecked Fukushima reactor. Testing of seawater and marine life has so far found no abnormalities.

The discharge has provoked protests in China, and Beijing has banned Japanese seafood imports. The potential for boycotts and other fallout weighed on several China-exposed stocks on Monday, but many were bought back in the latest session.

Cosmetics maker Shiseido jumped 2.18%. Department store operators J. Front and Takashimaya gained 2.48% and 2.15%, respectively.

Toyota Motor ended the day down 0.2%. It dipped as much as 0.82% earlier in the session after a system malfunction forced the automaker to idle domestic factories.

(Reporting by Kevin Buckland; Editing by Varun H K and Janane Venkatraman)

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