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Tokyo stocks rise on weak yen, firm banks amid higher interest rates
MAINICHI
| Februari 18, 2025
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TOKYO (Kydo) -- Tokyo stocks ended higher Tuesday, supported by buying of exporters on a weaker yen and banks on rising long-term yields in Japan.
The 225-issue Nikkei Stock Average ended up 96.15 points, or 0.25 percent, from Monday at 39,270.40. The broader Topix index finished 8.61 points, or 0.31 percent, higher at 2,775.51.
On the top-tier Prime Market, gainers were led by bank, electric power and gas, and air transportation shares.
The U.S. dollar briefly climbed to the lower 152 yen range in Tokyo after a Federal Reserve governor expressed caution Monday about further rate cuts, leading to speculation that the U.S.-Japan interest rate differential will remain wide, dealers said.
At 5 p.m., the U.S. dollar fetched 152.05-06 yen compared with 151.37-38 at 4 p.m. in London and 151.87-89 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.0463-0464 and 159.10-14 yen against $1.0482-0484 and 159.20-24 yen in Tokyo late Monday afternoon. U.S. financial markets were closed Monday for a public holiday.
The yield on the benchmark 10-year Japanese government bond rose 0.045 percentage point from Monday's close to a new 15-year high of 1.430 percent, as the debt continued to be sold on speculation of additional rate hikes by the Bank of Japan following recent stronger-than-expected gross domestic product data.
Stocks were boosted by the yen's depreciation, which benefited automakers and other export-oriented shares, as a weaker yen increases their overseas profits when repatriated.
The market was further supported by strong financial issues on hopes for improved profits as Japan's benchmark 10-year government bond yield continued to climb to fresh 15-year highs.
"While interest rates are rising (in Japan), the increase is more pronounced in the United States, leading to a weaker yen and a modest stock market rally," said Tomoichiro Kubota, senior market analyst at Matsui Securities Co.
Meanwhile, defense-related shares tracked overnight advances by their European counterparts amid expectations of increased military spending in the face of a less cooperative United States under President Donald Trump, analysts said.
"A similar sentiment could emerge in Japan. If the United States is less willing to assist, Japan may need to enhance its own military power," Kubota said, referring to the buying of defense-related stocks.
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