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Nikkei ends at 7-month high on hopes for slower US rate hikes

August 12, 2022By Reuters

Japan’s benchmark stock index ended at a seven-month high on Friday, led by SoftBank Group and other tech heavyweights, as signs of cooling US inflation raised hopes for smaller Federal Reserve rate hikes and boosted risk appetite.

The Nikkei share average jumped 2.62% to 28,546.98, its highest close since Jan. 12. The index, which posted the sharpest daily gain in three weeks, rose 1.32% for the week in its second straight weekly gain.

The broader Topix advanced 2.04% to 1,973.18 and rose 1.34% for the week.

Japanese markets were closed on Thursday for a local holiday.

Data released on Wednesday showed that US consumer prices were unchanged in July compared with June, prompting bets that the Fed could slow down its rate hikes.

“The Japanese market is stronger today than I had expected,” said Jun Morita, general manager of the research department at Chibagin Asset Management. “One reason for not buying stocks has been eliminated after investors confirmed the slower pace of US inflation.”

SoftBank Group jumped 5.55% and was the biggest boost for the Nikkei after the technology investor said it would book a USD 34.1 billion gain by trimming its stake in Alibaba Group Holding.

Chip-making equipment maker Tokyo Electron advanced 4.53% and robot maker Fanuc climbed 5.89%.

Honda Motor rose 3.82% after the automaker raised its outlook for full-year operating profit thanks to a weaker yen.

All the Tokyo Stock Exchange’s 33 industry sub-indexes rose, with precision instruments and electric appliances leading the rally, rising 3.77% and 3.06%, respectively.

(Reporting by Junko Fujita; Editing by Shailesh Kuber)

This article originally appeared on reuters.com

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