TOKYO, May 7 (Reuters) – Japan’s Nikkei share average
jumped more than 1% on Tuesday, as investor sentiment brightened
on higher bets of U.S. interest rate cuts this year while
technology shares continued to dazzle.
The Nikkei was up 1.18% at 38,688.66 by the midday
break, after briefly soaring to a three-week high of 38,863.14.
The broader Topix was up 0.28% at 2736.19.
U.S. stocks injected fresh momentum as markets priced in a
higher chance of the Federal Reserve cutting interest rates this
year. A U.S. jobs report on Friday showing growth slowed more
than expected in April further fuelled buying.
Japanese shares broadly climbed in the morning session on
the positive news, with 132 of the Nikkei’s 225 constituents
trading in green.
Local technology shares advanced as investors returning from
a long weekend caught up to buoyant Wall Street after U.S. tech
giant Apple posted upbeat revenue results. The session’s gains
significantly added to the Nikkei’s near 453-point climb.
Japan’s financial markets were closed on Friday and Monday
for a public holiday.
Fears had grown that no cuts would be made in 2024, so the
Nikkei was experiencing a bit of a “relief rally”, said Naka
Matsuzawa, chief macro strategist, Nomura Securities.
Some bumps may still be in store, however, as market
participants and central bank officials look to upcoming data to
confirm the Fed rate-cut story, he added.
In individual stocks, chip-related shares Tokyo Electron
and Screen Holdings surged 4.1% and 4.2%,
respectively.
Disco Corp jumped 6.7% to become the best performer
of the session.
AI-focused startup investor SoftBank Group gained
2.8%.
Outside of tech, Nikkei heavyweight and Uniqlo parent firm
Fast Retailing rose 3.5% to add 140.24 index points
alone.
Shares of Sony Group Corp fell 3.5% and
pharmaceutical company Daiichi Sankyo declined 3.7%,
capping the Nikkei’s gains.
(Reporting by Brigid Riley; Editing by Sherry Jacob-Phillips)
