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Japan’s Nikkei share average surged 3.5 per cent on Tuesday (Aug 13), with tech shares leading the rally as sentiment got a boost from a weaker yen as traders returned after a public holiday.
The Nikkei ended the day at the session’s peak of 36,232.51, trading higher in the last 40 minutes of trading. It spent much of the day flitting back and forth across the psychological 36,000 level, a level it hadn’t breached since Aug 2.
The broader Topix climbed 2.8 per cent.
Chip-making equipment giant Tokyo Electron led Nikkei gainers by index points with a 6.2 per cent rally. Chip-testing machine manufacturer Advantest was next, advancing 7.7 per cent.
Major exporters Sony Group and Toyota Motor rose 5 per cent and 3.3 per cent, respectively. A weaker yen inflates the value of overseas sales when repatriated.
The Japanese currency declined about 0.3 per cent to 147.64 per dollar as of 0600 GMT, extending a 0.4 per cent slide from overnight.
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Japanese equity markets were closed on Monday for the Obon holiday.
The yen had strengthened as far as 141.675 per dollar on Aug 5 for the first time since the start of this year after surprisingly soft US monthly payrolls figures ignited fears of a recession. The Nikkei had slumped to as low as 31,156.12 on that same day for the first time in almost nine months.
US macro data has improved since then, but the economic outlook faces a crucial week with the release of producer inflation data later on Tuesday, followed by consumer inflation data on Wednesday and retail sales a day after.
“What’s really in focus is whether we see a slowdown in US consumption, or in the US economy as a whole,” said Maki Sawada, an equities strategist at Nomura Securities.
“The reaction in foreign-exchange rates and in US equities is going to have a huge effect on the Japanese stock market.” REUTERS
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