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Japan’s Nikkei index rose by 0.68%, closing at 38,211.01, its highest level since August 1, 2024. Investors are staying cautious as they await important speeches from central bank leaders in both Japan and the United States.
The market’s attention is now on the upcoming remarks from Bank of Japan (BOJ) Governor Kazuo Ueda and U.S. Federal Reserve Chair Jerome Powell. Analysts suggest that these comments could influence monetary policies and market movements in the coming weeks. Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory, noted that “caution ahead of these statements kept gains in check,” despite the recent recovery.
The Nikkei experienced a significant 12.4% drop on August 5, 2024, the largest single-day decline since the 1987 Black Monday crash. However, the index rebounded by 10% the following day. Despite this recovery, the Nikkei remains below its July peak, when it exceeded 42,000 points. The recent gains have been bolstered by a recovery in foreign investments and positive earnings reports from major Japanese firms.
Investors are also keeping an eye on the yen’s performance, which has seen fluctuations due to ongoing monetary policies. A weaker yen generally boosts export-driven companies, a factor that has contributed to the stock market’s recent recovery. Major players, including Uniqlo-owner Fast Retailing, saw their stocks rise significantly, providing a boost to the overall market.
With central bank meetings on the horizon, the market is bracing for potential changes in policy direction. Analysts believe that while immediate rate hikes are unlikely, the central banks’ outlooks will play a critical role in shaping investor sentiment for the remainder of the year.