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Japan’s Nikkei share average ended Friday’s trading session with notable gains, closing up 0.4% at 38,364.27, following a tumultuous day influenced by Bank of Japan (BOJ) Governor Kazuo Ueda’s parliamentary testimony. The index experienced considerable volatility throughout the day, initially rising before slipping into the lunch break and subsequently recovering in the afternoon.
The broader Topix index also saw a positive turn, climbing 0.5% by the close of trading.
Morning sessions saw Ueda adopt a hawkish tone, signaling a potential for further interest rate hikes should inflation trends meet expectations. Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, noted that Ueda’s initial remarks reinforced the possibility of tighter monetary policy if inflationary pressures persist.
However, Ueda’s tone softened in the afternoon. He aligned more closely with Deputy Governor Shinichi Uchida’s recent statements, which suggested that the BOJ would refrain from aggressive policy adjustments during periods of market instability. This dovish shift helped to stabilize market sentiment and contributed to the Nikkei’s afternoon rebound.
The yen mirrored this shifting sentiment, trading approximately 0.5% stronger at 145.65 per dollar, recovering much of its losses from the previous session.
As traders recalibrated their strategies, attention turned to the upcoming keynote speech by Federal Reserve Chair Jerome Powell at the Jackson Hole symposium. Market participants are keenly awaiting Powell’s remarks for potential insights into future U.S. monetary policy.
Among the 225 components of the Nikkei index, 175 stocks registered gains, while 50 declined. Technology shares were notably weak, with chip stocks underperforming following a downturn in their U.S. counterparts. Tokyo Electron, a major player in chip-making machinery, fell 2.52%, while Advantest, a chip-testing equipment manufacturer, saw a 3.41% drop. Lasertec also experienced a 3.09% decline.
In contrast, the healthcare sector continued its strong performance, with Sumitomo Pharma advancing 3.53%. Sharp Corp emerged as the day’s top performer, surging nearly 7% on news of ongoing investment discussions with SoftBank Corp. SoftBank shares also saw a modest rise of 0.48%.
This mixed but generally positive market movement reflects the market’s cautious optimism and sensitivity to central bank signals and external economic developments.