Japanese shares rise on hopes weaker yen will boost corporate earnings

Japanese stocks rose on Tuesday by the most in a week on hopes that a weaker yen will support the earnings of the country’s major exporters.

The Nikkei index ended up 0.81 per cent at 23,520.01 points, its biggest daily gain since Nov. 5.

Japanese stocks initially started on the back foot amid uncertainty over the progress of US-China trade talks and an escalation of violence in Hong Kong, but local shares gradually shook off these concerns.

The yen traded near a five-month low versus the dollar, which tends to benefit exporters because a weaker currency helps export competitiveness and inflates earnings repatriated from overseas.

“A weak yen is supporting some of the shares in the Nikkei that export a lot of goods,” said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

“The United States and China are in a standoff, and the situation in Hong Kong is not good. However, the US economy is improving, and this is more important for Japan.”

The consumer discretionary sector was the biggest gainer on Tuesday as shares of electronics maker Sony Corp rose 1.26 per cent. The technology sector was the second-biggest gainer, led by a 3.5 per cent increase in shares of chip equipment maker Advantest Corp.

There were 156 advancers on the Nikkei index against 65 decliners on Tuesday.

The largest percentage gainers were consumer finance company Credit Saison Co Ltd, up 7.77 per cent, followed by textile maker Unitika Ltd gaining 6.37 per cent and construction company Obayashi Corp up by 5.95 per cent.

The largest percentage losses were Mitsui Mining and Smelting Co Ltd, down 13.2 per cent, followed by commercial bank operator Concordia Financial Group Ltd losing 3.4 per cent and processed food maker Ajinomoto Co Inc down by 3.28 per cent.

Some traders were cautions before a speech by US President Donald Trump to the Economic Club of New York later in the day, which could provide more clues about Sino-US trade talks.

The Topix index reversed early losses to end up 0.33 per cent at 1,709.67.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.26 billion yen ($11.55 million), compared with the average of 1.25 billion yen in the past 30 days.


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