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Japanese stocks advanced with the benchmark index continuing gains from yesterday following the Federal Reserve announcement to end its bond-buying program. The yen weakened significantly.
The Topix Index added 0.5% to 1,276.49, 9:30 am, Tokyo time. In the previous trading session, the index managed to advance by 1.5%. From its October 17 low, the Topix has already recovered a total of 7.9%. The Nikkei 225 Stock Average gained 0.5% to 15,628.88 while the nation’s currency weakened to match the dollar at 108.98 yen per dollar. Yesterday, the currency shed 0.7%.
Honda Motor Co. and Nintendo Co. surged by 1.5% and 3.5% respectively on good corporate earnings. Yahoo Japan Corp. tumbled by 6.1% after lowering profit forecast below estimates.
The Federal Reserve policy meeting has been concluded. In it, the Fed announced that it will keep its interest rates lowered still for a “considerable time” with officials saying that labor market conditions in the country have “improved somewhat further”. They added that indicators were suggesting that “underutilization of labor resources is gradually diminishing.”
Tomorrow, the Bank of Japan will be holding a meeting regarding policy decisions.
Executive officer at Ichiyoshi Asset Management Co., mitsushige Akino, commented to Bloomberg that big manufacturers are faring well because of the US recovery and the weaker yen. Akino adds that the positive influence is extending to other groups.
Market strategist at LPL Financial, Anthony Valeri, commented to Bloomberg that the Fed statement was a little bullish and bordering on the hawkish side for the economy due to the nod towards the labor department. Valeri adds that the expectations were that the Fed be more on the dovish side with the aim of minimizing market reaction instead of their actual optimistic reaction that spurred higher bond yields and equities.
