TOKYO: Japan’s Nikkei share average rose on Friday as a weaker yen lifted automakers, and financial stocks gained after raising their annual profit forecasts.
The Nikkei was up 0.8% at 38,842.13 by the midday break but is set to lose 2.4% for the week.
The broader Topix had climbed 0.86% to 2,724.35 but is on course to post a 1.49% weekly loss.
“The yen’s weakness has lifted Japanese shares,” Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory said.
“Gains in European shares and Wall Street’s weak finish overnight suggest that funds that were flown into U.S. equities excessively in Trump trades are now reallocated to other regions.”
Wall Street’s main indexes closed lower on Thursday after Federal Reserve Chair Jerome Powell dampened investors’ hopes for another interest rate cut this year by saying the U.S. central bank need not rush to ease monetary policy.
Japan’s Nikkei ekes out gains on softer yen in choppy trade
The yen was 0.1% lower at 156.38 per dollar, nearing a territory that triggered intervention from Japanese authorities in the past.
A weaker yen tends to boost exporters’ shares, as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.
Japan’s three major banks increased after they raised their annual profit forecasts to all-time highs on Thursday, fuelled by robust lending demand and higher margins following a July interest rate hike by the Bank of Japan.
Mizuho Financial Group jumped 6.4%. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rose 1.2% and 1.13%, respectively.
Toyota Motor gained 2% and Honda Motor rose 2.3%.
Nissan Motor climbed 4.7% after Japan’s Diamond Online magazine reported that activist investor Oasis Management had taken a stake in the automaker.
Nissan is poised to post a 6.5% weekly gain after a filing earlier this week showed that an entity related to activist investor Effissimo Capital Management had taken a stake in the company.
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