Stock market today: Asian benchmarks are mixed as Tokyo sips on strong yen (2024)

TOKYO (AP) — Asian shares traded mixed Thursday as Tokyo’s benchmark plunged as the U.S. dollar sank against the yen.

Regional investors are also digesting the rally on Wall Street that came on hopes U.S. cuts to interest rates will be arriving soon.

A strong yen is a plus for Japan’s purchases but hurts the nation’s giant exporters like Toyota Motor Corp., by eroding the value of overseas profits.

Japan’s benchmark Nikkei 225 dipped 2.6% in morning trading to 38,094.24. Australia’s S&P/ASX 200 edged up 0.4% to 8,125.80. South Korea’s Kospi rose 0.5% to 2,785.56. Hong Kong’s Hang Seng slipped 0.3% to 17,285.66, while the Shanghai Composite lost 0.3% to 2,931.50.

In currency trading, the U.S. dollar fell to 149.61 Japanese yen from 149.92 yen. The euro cost $1.0831, little changed from $1.0830. The dollar had been trading at 160-yen levels several weeks ago. But that reversed course as anticipation grew for a Bank of Japan rate cut, which came Wednesday.

Toyota stock sank 5.3%, while Nintendo fell 3.5% and Sony 3.1%.

Analysts said indications from the Federal Reserve were that rate cuts were coming.

“A September cut is now priced in with certainty, and almost three cuts are priced in by the year-end,” said Robert Carnell, regional head of research Asia-Pacific at ING Economics.

On Wall Street, the S&P 500 jumped 1.6% for its best day since February. The Dow Jones Industrial Average rose 99 points, or 0.2%, and the Nasdaq composite soared 2.6%.

The widespread gains came as Treasury yields eased in the bond market after the Federal Reserve gave the clearest indication yet that it could begin lowering interest rates in September. Fed Chair Jerome Powell said policy makers are “getting closer to the point” of comfort about inflation where they could cut rates for the first time since COVID-19 crashed the economy.

“We think that the time is approaching,” Powell said. “And if we do get the data that we hope we get, then a reduction in our policy rate could be on the table at the September meeting.”

After the Fed voted to keep interest rates steady on Wednesday, as was widely expected, Powell spent much of an ensuing press conference discussing the risks of both moving too early or too late with rate cuts. One could allow inflation to reaccelerate, while the other could cause unnecessary pain for the economy and ultimately throw Americans out of their jobs.

After keeping its main interest rate at a two-decade high for roughly a year, speculation may rise that the Fed waited too long. That “has the potential to add to the stock market’s choppiness as we head toward what is historically its most volatile period,” said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.

For Wednesday, though, the dominant mood on Wall Street was jubilance.

Advanced Micro Devices rallied 4.4% after reporting better profit and revenue for the latest quarter than analysts expected, thanks in part to accelerating artificial-intelligence business. That helped drive Nvidia, the chip company that’s become the poster child for Wall Street’s frenzy around AI, up 12.9% a day after it lost 7%.

How such Big Tech stocks perform matters a lot because they’re Wall Street’s most valuable companies, and that gives them the biggest sway on the S&P 500. A handful of these stocks, known as the “Magnificent Seven,” drove the U.S. stock market to dozens of records this year, even as many other stocks struggled under the weight of high interest rates. But they ran out of momentum this month amid criticism they had gotten too expensive and expectations had run too high.

Such criticism hasn’t gone away, and Microsoft fell 1.1% despite reporting profit and revenue for the latest quarter that edged past analysts’ expectations. Growth in its Azure cloud-computing business fell a bit shy of analysts’ forecasts. That followed earlier profit reports from Tesla and Alphabet that investors found underwhelming, which raised concerns that other Magnificent Seven stocks could also fail to impress.

Meta Platforms rose 2.5% as investors waited for its profit report, which arrived after trading closed for Wednesday. Amazon and Apple will follow on Thursday, and each rose at least 1.5%.

Stronger-than-expected profit reports from companies outside the Magnificent Seven also helped lift the market.

Match Group jumped 13.2% after saying its user trends for Tinder are stabilizing and reporting results for the latest quarter that roughly matched analysts’ expectations.

DuPont rose 4.1% after delivering better profit and revenue than expected, thanks in part to a recovery for the electronics business, and the chemical giant raised its financial forecasts for the full year.

They helped offset a 3% drop for Altria Group after the maker of cigarettes and smoke-free products fell short of expectations for profit and revenue in its latest quarter.

All told, the S&P 500 rose 85.86 points to 5,522.30. The Dow gained 99.46 to 40,842.79, and the Nasdaq composite jumped 451.98 to 17,599.40.

In the bond market, the yield on the 10-year Treasury eased to 4.05% from 4.14% late Tuesday. It’s been falling from 4.70% in April as a slowdown in inflation raised expectations for coming cuts to interest rates.

Yields fell in the morning after a report showed U.S. employers spent less in total pay and benefits for workers during the spring than economists expected. Another suggested hiring by employers outside the government was a touch weaker than expected.

While workers would surely like such numbers to be stronger, it could be the type of “Goldilocks” data that Wall Street is looking for: not so strong that it pushes upward on inflation but not so weak that it raises worries about a recession.

Some of Wednesday’s strongest action was in the oil market, where the price for a barrel of benchmark U.S. crude jumped about 4%. Hamas’s top political leader Ismail Haniyeh died in a predawn airstrike in the Iranian capital early Wednesday, Iran and the militant group said, blaming Israel for a shock assassination that could escalate conflict in the region and potential disrupt the flow of oil. There was no immediate comment from Israel.

Benchmark U.S. crude rose 52 cents to $78.43 a barrel. Brent crude, the international standard, added $2.09 to $80.72 a barrel.

___

AP Business Writer Stan Choe contributed.

Stock market today: Asian benchmarks are mixed as Tokyo sips on strong yen (2024)

FAQs

Why is Japan stock market rising? ›

By borrowing low-cost yen to buy Japanese stocks, or even shorting the yen to amplify profits, investors have rapidly pushed up the market, with the Nikkei 225 index surging from around 24,000 points in 2022 to more than 42,000 points this year – a nearly 80% increase.

What do you call the stock market of Tokyo? ›

The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, headquartered in its capital city of Tokyo. The Tokyo Stock Exchange was established on May 15, 1878. As of Sept. 14, 2021, the exchange had 3,784 listed companies.

Why is Japan a good country to invest in? ›

Deep market breadth and quality

Japan's market has the largest average daily trading volume in Asia after China's onshore market, surpassing even Hong Kong. Its depth and breadth could attract more significant international funds, potentially closing the gap with the leading Chinese exchanges.

What is the best way to invest in Japan stock market? ›

Platforms like Interactive Brokers and Schwab offer international coverage, allowing you to buy Japanese stocks directly. You can also invest in Japan-focused mutual funds or ETFs that track indices like the Nikkei 225 and TOPIX, providing broad exposure to the market.”

What is the Japanese technique of stock market? ›

The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow white (or green) candles with no lower shadows are used to signal a strong uptrend, while filled black (or red) candles with no upper shadow are used to identify a strong downtrend.

What is the all time high of the Japanese stock market? ›

Historically, the Japan Stock Market Index (JP225) reached an all time high of 42438 in July of 2024. Japan Stock Market Index (JP225) - data, forecasts, historical chart - was last updated on August 6 of 2024.

Who owns Tokyo Stock Exchange? ›

The exchange is owned by Japan Exchange Group (JPX), a holding company that it also lists (TYO: 8697), and operated by Tokyo Stock Exchange, Inc., a wholly owned subsidiary of JPX.

Why is the Japanese economy growing? ›

The most notable feature of Japan's economic growth since World War II is the rapid development of manufacturing, with progress in quantitative growth, quality, variety, and efficiency. Emphasis has shifted from light to heavy industries and to a higher degree of processing.

What is the outlook for the Japanese market? ›

They forecast return on equity for Japanese stocks to reach 12% by the end of 2025 versus 10% currently, helped by further margin improvement in the majority of industries and strong top line revenue growth driven by domestic GDP growth as well as Japanese firms' success in overseas markets.

Is the Japanese market overvalued? ›

Despite the record highs, analysts generally believe that Japanese stocks are currently not overvalued. The Tokyo market's price-to-earnings ratio stands at around 16, in contrast to 23 for both the S&P 500 and the Sensex. For the year 2023, Nikkei 225 witnessed a return exceeding 28%.

Why is Japan so reliant on trade? ›

Japan lacks many raw materials needed for industry and energy, such as oil, coal, iron ore, copper, aluminum and wood. Japan must import most of these goods. In order to pay for these imports, Japan must export a variety of manufactured goods to other countries.

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