Image Credits : Archyde
Japan’s Nikkei share average closed with gains on Friday after a day marked by volatility, as Bank of Japan (BOJ) Governor Kazuo Ueda softened his hawkish stance. The index finished up 0.4% at 38,364.27, recovering from mid-session losses, while the broader Topix index also climbed 0.5%.
The session began with a hawkish tone from Ueda during parliamentary testimony, where he hinted at possible future interest rate hikes if inflation continues to rise. “Ueda’s morning comments suggested a tightening of monetary policy could be on the horizon if inflation trends persist,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management to local media.
However, Ueda tempered his remarks later in the day, aligning more closely with Deputy Governor Shinichi Uchida’s view that the central bank would avoid drastic policy moves during times of market instability. This shift in tone provided reassurance to investors and spurred a market rally after the lunch break. “His softer stance helped stabilize the market and encouraged the afternoon rebound,” noted Ichikawa.
The Japanese yen also reacted to Ueda’s comments, strengthening by about 0.5% to 145.65 per dollar, reversing much of the previous session’s losses. Traders are now eagerly awaiting Federal Reserve Chair Jerome Powell’s keynote speech at the Jackson Hole symposium, which could offer further insight into U.S. monetary policy.
Of the 225 companies listed on the Nikkei, 175 saw their stocks rise, while 50 experienced declines. The technology sector, however, faced headwinds, with chip-related stocks tracking a sell-off in U.S. markets. Tokyo Electron, a major player in chip-making machinery, dropped 2.52%, while chip-testing equipment manufacturer Advantest fell 3.41%. Lasertec, another semiconductor firm, declined by 3.09%.
On the upside, the healthcare sector continued its strong performance, with Sumitomo Pharma gaining 3.53%. Sharp Corp. surged nearly 7% amid reports of ongoing investment talks with SoftBank Corp., whose shares also saw a modest 0.48% rise.