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Japanese shares mostly increased after the yen weakened further to its lowest in seven years versus the dollar. The plummet followed the release of the Federal Reserve minutes that emphasized a divergence in the global monetary policy.
The Topix Index climbed by 0.2% to 1,398.74, 12:47 pm, Tokyo time. The trend showed that for every nine shares climbing, seven dropped. The Nikkei 225 Stock Average added 0.1% to 17,311.77 as the nation’s currency dropped further by 0.3% to match the dollar at 118.32 yen per dollar. It is the currency’s weakest in seven years all the way back to August of 2007.
Toray Industries Inc. led the textile industry, surging by 6.6%. Toyota Motor Corp. rose by 0.8% while Mitsubishi Estate Co. shed 2.1%. Developers led losses in the gauge.
Executive officer at Ichiyoshi Asset Management Co., Mitsushige Akino, commented to Bloomberg that while the spotlight is on the bets of US interest rate hike, Japan continues to ease. Akino adds that the confirmation of the diverse policy directions has spurred the yen to weaken and reach the 118 yen mark as large cap stocks would most likely increase today.
For the past two days, Japanese stocks rallied following Prime Minister Shinzo Abe’s announcement to delay the tax hike, call for a snap election, and prepare for a stimulus package. The Topix has plummeted earlier in the week as the Japanese economy unexpectedly entered recession. Data also showed that exports added 9.6% for the month of October compared to last year’s data in the same month. It is also the biggest increase in eight months.
The BOJ also added to stimulus saying that it will expand monetary base.
