Japan’s Nikkei share average closed at a three-week high on Thursday (Aug 22), recovering from the index’s sharpest drop in 37 years hit earlier this month, but caution ahead of remarks from central bank heads in Japan and the US capped gains.
The Nikkei rose 0.68 per cent to 38,211.01, its highest close since Aug 1.
“The market was cautious ahead of the remarks by the Bank of Japan Governor (Kazuo) Ueda as well as Federal Reserve Chair (Jerome) Powell later this week,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
“Also, with the Nikkei recovering to this level, some players wanted to sell stocks at a rally.”
The Nikkei plunged 12.4 per cent on Aug 5 in its biggest decline since the 1987 Black Monday crash but bounced back 10 per cent the following day.
The index is still below its July peak above 42,000, but has risen 23 per cent from its Aug 5 low.
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Foreign investors exited Japanese cash equities worth 47.9 billion yen (S$430.2 million) in the week ended Aug 17, after about 521.9 billion worth of net purchases in the prior week.
The market focus is also on Powell’s keynote speech at Jackson Hole and a special session of Japan’s parliament on Friday )Aug 23), where BOJ’s Ueda will speak.
Uniqlo-brand owner Fast Retailing rose 2.5 per cent to boost the Nikkei the most. Silicon wafer maker Shin-Etsu Chemical jumped 2.75 per cent.
Technology investor SoftBank Group fell 1.25 per cent and weighed on the Nikkei the most.
The broader Topix rose 0.25 per cent to 2,671.4.
Japan Tobacco rose 1.41 per cent, after the tobacco and drink maker agreed to acquire US’ Vector Group in an around US$2.4 billion deal.
The drug sector rose 1.56 per cent to become the top performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.
Banking, down 1.3 per cent, was the worst performing sector. REUTERS
