TOKYO: Japanese stocks rose Friday morning as another weak batch of US data dimmed the likelihood the Federal Reserve will hike interest rates next week.
Tokyo’s markets have see-sawed this week following conflicting signals from Fed officials about the need to tighten borrowing costs at its policy meeting next week.
But figures showing lacklustre US retail sales and tepid wholesale inflation all but wiped out the chances of a lift-off until at least December.
The news lifted US stocks, with Wall Street’s three main indexes clocking up gains of more than one percent, providing a platform for Asian traders ahead of the Fed policy meeting as well as the Bank of Japan’s own gathering next week.
The Tokyo Stock Exchange’s benchmark Nikkei 225 index gained 0.39 percent, or 63.21 points, to 16,468.22 by the break, while the Topix index of all first-section issues was up 0.43 percent, or 5.57 points, at 1,306.68.
“With nothing in the economic numbers to say US rates should be moving up, and growing signs of losing momentum, expectations have largely diminished toward the Fed doing anything in September,” Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand, said in a note to clients.
“The market is drifting back toward the view they might do nothing for quite a while,” he said.
Traders remain on edge ahead of the BoJ meeting after reports said it would discuss cutting rates further into negative territory.
The bank wrong footed markets in January when it adopted a negative rate policy to go with its massive asset-purchase programme, part of a drive to kickstart bank lending and, in turn, inflation and spur economic growth.
“Trading is expected to remain cautious at least until we can confirm the decision by the BoJ,” Shinichi Yamamoto, broker at Okasan Securities in Tokyo, told AFP.
The dollar fell to 102.05 yen in Tokyo from 102.10 yen in New York, and well down from the 102.28 yen earlier Thursday in Asia.
Banking stocks bounced back after suffering hefty losses on the negative inflation speculation. Mitsubishi UFJ Financial Group jumped 2.47 percent to 510 yen and Sumitomo Mitsui Financial Group gained 2.39 percent to 3,425 yen.
Mobile phone operators were mixed after the Friday release of the iPhone 7. SoftBank rose 1.90 percent to 6,466 yen, while rival NTT DoCoMo fell 0.25 percent to 2,503 yen.
