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BCN-06
STOCKS-MARKETS-JAPAN-OPEN
Tokyo stocks open higher on Fed optimism
TOKYO, June 20, 2019 (BSS/AFP) – Tokyo stocks opened higher on Thursday
after modest gains on Wall Street as the US central bank signalled it could
soon cut interest rates.
The benchmark Nikkei 225 index rose 0.44 percent or 93.38 points to
21,427.25 in early trade while the broader Topix index was up 0.25 percent or
3.82 points at 1,559.09.
Hopes for cheaper money lifted stocks as the US Federal Reserve vowed to
act to keep the American economy growing as uncertainties mount over trade
and other geopolitical and economic issues.
US Federal Reserve chief Jerome Powell said trade friction and slowing
growth worldwide have led many central bankers to feel the case for an
interest rate cut has “strengthened” but most still want to see more data
before making a move.
“A new round of Fed easing is largely contingent on the outcomes from the
upcoming G20 meeting between President Trump and Xi,” National Australia Bank
said in a commentary.
US President Donald Trump expects to meet his Chinese counterpart Xi
Jinping at the G20 summit in Japan next week.
“For now though, the change in the Fed’s bias has encouraged the market to
increase its expectations that a new round of easing is just around the
corner,” it said.
Japanese stock prices will likely be solid on Thursday but a higher yen
could weigh, said Okasan Online Securities chief strategist Yoshihiro Ito.
“Growing expectations for a US rate cut pushed the yen up, capping gains
(in stocks),” he said in a note.
A strong yen hurts Japanese exporters as it makes their products less
competitive abroad and also erodes profits when repatriated.
Some leading automakers fell, with Toyota down 0.41 percent at 6,744 yen
and Honda down 1.52 percent at 2,781 yen.
The dollar stood at 107.91 yen, down from 108.08 yen in New York and the
mid-108 yen range seen in Tokyo afternoon on Wednesday.
The Bank of Japan is to wrap up a two-day policy meeting later Thursday
but is largely expected to stay pat.
BSS/AFP/HR/0950