Tokyo shares rose Wednesday as growing expectations for a US interest rate hike sent the dollar up against the yen, boosting Japan's exporters. Comments from two top Federal Reserve officials Tuesday suggesting borrowing costs should rise gave fresh support to the greenback, which was already strengthening after solid US manufacturing data last week.
"A December rate hike seems almost certain, and it sounds like that may be followed by two more rate hikes next year instead of one," said Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities. By the end of trade the benchmark Nikkei 225 index advanced 0.50 percent, or 83.59 points, to 16,819.24, while the Topix index of all first section shares gained 0.57 percent, or 7.60 points, to end at 1,347.81.
"As long as the decline in US stocks remains minimal, growing expectations for a US rate hike will work in favour of Japanese shares by weakening the yen against the dollar," Masahiro Ichikawa, a Tokyo-based senior strategist at Sumitomo Mitsui Asset Management, told Bloomberg News. Firms that do business overseas rallied, with Panasonic jumping 1.71 percent to 1,039.5 yen, Toyota up 1.50 percent at 5,988 yen and Sony rising 0.62 percent to 3,392 yen.
Hitachi surged 6.35 percent to 502.4 yen, after a report said the company wants to sell power-tool and semiconductor subsidiaries. Yamaha Motor jumped 4.25 percent to 2,157 yen while Honda gained 2.92 percent to 3,074 yen, on reports the two motorcycle giants are in talks over joining up their scooter divisions. The companies confirmed the report after the market closed. Tokyo Electric Power dropped 3.27 percent to 414 yen after its president told reporters it would face insolvency if it recognised at one time the cost of decommissioning the crippled Fukushima nuclear plant.
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