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Tokyo shares open higher after US rallies on dovish Fed (lead)
TOKYO, Jan 31, 2019 (BSS/AFP) – Tokyo shares opened higher Thursday
following overnight rallies on Wall Street, as the US Federal Reserve voiced
a cautious stance about future rate hikes.
The Nikkei 225 index added 1.34 percent, or 276.37 points, to 20,832.91 at
the open while the broader Topix index rose 1.28 percent, or 19.78 points, at
1,570.54.
Investors cheered as the Fed signalled a cautious approach to tightening
monetary policy, which was seen as being more market-friendly than some
analysts expected.
Fed Chairman Jerome Powell said the case for further rate hikes had
“weakened somewhat” and the central bank decided to keep interest rates
unchanged.
The Dow finished 1.8 percent higher, boosted also by better-than-expected
earnings from Apple and Boeing.
“The Nikkei index was expected to rebound today. US shares digested the
FOMC and ended largely higher,” said Okasan Online Securities in a note to
clients, referring to the Federal Reserve meeting.
“Small and medium-sized shares that plunged yesterday should see bargain
hunters.”
The brokerage warned, however, of possible volatility ahead for some shares
as the corporate earnings season kicks into full gear.
The Fed’s message also drove down the dollar, a trend that often weighs on
Japanese exporters.
The US currency stood at 108.88 yen, against 109.02 yen in New York
Wednesday.
Investors also kept their eyes on US-China trade talks that opened in
Washington.
Shortly before the opening bell, the Japanese government announced that the
nation’s industrial production in December dropped 0.1 percent from the
previous month.
It was better than the market’s expectation of a 0.5 percent decrease, but
still marked the seventh fall in the last nine months.
Still, the industry ministry maintained its assessment that “industrial
production is picking up slowly”.
Among major shares, Nintendo, which is slated to publish its earnings later
in the day, jumped 3.25 percent to 34,230 yen.
Canon dropped 0.41 percent to 3,121 yen after announcing on Wednesday that
it expected its annual net profit for this calendar year to fall 5.0 percent
due to forex movements and shrinking camera demand.
Toyota edged up 0.50 percent to 6,672 yen, while Sony jumped 2.27 percent
to 5,401 yen.
BSS/AFP/HR/0922