Japan stocks up for seventh trading session on rising yields, falling yen

Credit: REUTERS/ISSEI KATO

Japanese stocks rose to a six-week high on Wednesday as bank shares extended recent gains thanks to rising bond yields, while major exporters reaped the rewards of a faltering yen.

By Stanley White

TOKYO, Sept 11 (Reuters) - Japanese stocks rose to a six-week high on Wednesday as bank shares extended recent gains thanks to rising bond yields, while major exporters reaped the rewards of a faltering yen.

Suppliers to Apple Inc APPL.O also gained after the California-based tech company announced a new lineup of iPhones.

The Nikkei index ended up 0.96 percent at 21,597.76 on Wednesday after earlier rising to 21,619.21, the highest since July 30.

The index has risen for the seventh consecutive session as a global sell-off in bonds lifts yields and hopes for U.S.-China trade negotiations draw money into the stock market.

"There are signs of progress in U.S.-China trade talks, and Treasury yields have started rising, which is totally different from August," said Hideyuki Ishiguro, senior strategist at Daiwa Securities.

"The rising Treasury yields are triggering a decline in the yen, which is causing people to re-evaluate Japanese shares. People are also re-assessing Japanese banking shares because of the rise in Japanese yields."

There were 203 advancers on the Nikkei index against 20 decliners.

The largest percentage gainers in the index were Fukuoka Financial Group Inc 8354.T up 6.67%, followed by Concordia Financial Group Ltd 7186.T gaining 6.33%, and Resona Holdings Inc 8308.T up by 6.25%.

The broader Topix .TOPX ended up 1.65 percent at 1,583.66, the highest since July 9.

Japanese mega-bank shares rallied. Mitsubishi UFJ Financial Group Inc 8306.T ended up 4.43%, Sumitomo Mitsui Financial Group Inc 8316.T rose 3.14%, and shares in Mizuho Financial Group Inc 8411.T climbed 1.95%.

Yields on major government bonds have risen sharply recently, which eases the path for Japan's banks to earn profits on lending.

The focus will shift to the European Central Bank's policy meeting on Thursday, where policymakers are expected to cut rates but may hold off on using quantitative easing, its strongest tool to ease policy.

Toyota Motor Corp 7203.T jumped 2.39%, Honda Motor Co 7267.T climbed 3.74% and Subaru Corp 7270.T gained 2.26% as a weaker yen boosts exporters' earnings.

Japan-based Apple suppliers Murata Manufacturing Co 6981.T rose 2.26%, Alps Alpine Co 6770.T jumped 3.57%, and Minebea Mitsumi Inc 6479.T advanced 1.93%.

The largest percentage losses on the Nikkei index were Chugai Pharmaceutical Co Ltd 4519.T down 3.39%, followed by Mitsubishi Estate Co Ltd 8802.T, which lost 1.62%.

The volume of shares traded on the Tokyo Stock Exchange's main board .TOPX was 1.15 billion, compared to an average of 1.13 billion yen in the past 30 days.

(Editing by Shri Navaratnam and Catherine Evans)

((stanley.white@thomsonreuters.com; +81 3 6441 1984 twitter.com/stanleywhite1))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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