Nikkei closes above 70,000 for first time in three months; yen slides into the 158 range
It closed at 70,683.98, up 737 points. Gains in U.S. tech stocks lifted AI and chip shares. At 5 p.m. the yen stood around ¥158.10, 45 sen weaker than the day before. A report on the public pension fund's investments and fading hopes of an early Bank of Japan rate hike drove yen selling
The Nikkei Stock Average posted a second straight gain in Tokyo on Oct. 6, closing at 70,683.98, up 737.12 points, or 1.05%. It was the first close above 70,000 since July 1, about three months ago. Following gains in chip and other tech stocks in New York the day before, buyers went for AI and chip-related names such as Advantest and TDK. The Nikkei newspaper reported that Advantest hit an all-time high for a second day running. Helped by the weaker yen, exporters such as Toyota Motor also rose. In the morning session the index was up only 134 points at 70,081.53, and some chip stocks saw profit-taking, but gains widened in the afternoon. Reuters cited calmer oil prices and buying on earnings hopes ahead of reporting season. The Nikkei newspaper described it as buying in advance of an “earnings-driven market” that prices in better-than-expected results. The previous close, on Oct. 5, was 69,946.86, and the index had briefly regained 70,000 during trading that day too (Kyodo). The index first closed above 70,000 on June 18, and after July 1 it had stayed below that level at the close. After the summer correction, it took about three months to win back the milestone.
At 5 p.m. the yen traded at ¥158.10-11 to the dollar (Jiji Press), 45 sen weaker than at the same time the day before. The Nikkei reported ¥158.12-14. Toward midday, a report about how the Government Pension Investment Fund (GPIF) invests deflated hopes that more money would flow into yen assets, and the yen was sold. At noon it stood at ¥158.01-03, 36 sen weaker than at 5 p.m. the previous day (Nikkei). A view also spread that the Bank of Japan will not hurry to raise rates at its Oct. 29-30 monetary policy meeting. Kyodo News said rising U.S. long-term rates had renewed attention to the U.S.-Japan interest rate gap, and that wariness about currency intervention by the government and the BOJ remains. The record close is 72,366.34, set on June 25, still about 1,680 points higher. Stocks rose and the yen fell on the same day because the market keeps reading a weak yen as a boost to exporters' profits, and that view supports buying. But a weak yen also weighs on households through import prices. The substance of the GPIF report has not been confirmed by any formal announcement from the government or the fund. The yen's course is likely to swing on speculation before the BOJ meeting and on whether the report is confirmed.