The Japanese Nikkei index rose Monday, July 31, to its highest level in four weeks, amid an improvement in investor sentiment on the back of calm in the bond market after the Bank of Japan suddenly adjusted its policy and increased optimism due to the slowdown in inflation in the United States.
The results of some companies led to an increase in their shares, and the share of Toyota Tsusho Logistics Services, affiliated to the Toyota Group, increased by nearly 10%, which helped to advance the automotive sector.
The Nikkei index rose 1.26% to 33,172.22 points, and it had risen by as much as 2% earlier in the session. The broader Topix index rose 1.39% to 2,322.56 points.
Of the 225 stocks on the Nikkei index, 191 rose and 34 fell.
Analyst opinions
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, said the Bank of Japan “has maintained its monetary easing policy for the time being, so the uncertainty we saw recently has receded.”
He added, “It is possible that today will be the highest level for this week. And given the lack of progress in cutting interest rates, it seems unlikely that the yen will continue to fall and stocks will rise.”
On Friday, the Bank of Japan kept its stimulus measures unchanged, but announced that it would carry out bond purchases at 1% instead of the official ceiling of 0.5%, as it controls the yield curve.
Japanese government bond yields rose to their highest level in nine years at 0.605% to start trading on Monday, but did not rise from that after the central bank conducted additional purchases to slow its rise.
Japanese stocks also received a boost from a rally on Wall Street on Friday, after data showed inflation in the United States rose at the slowest pace since early 2021.
The precision machinery sector was the best performer among the 33 sectors on the Tokyo Stock Exchange on Monday, up
3%, followed by the transportation equipment sector, up 2.83%.
On the other hand, Sumitomo Pharma fell more than 10% after the disappointing results of its experiments on treating schizophrenia, and Fanuc robotics company lost 7.27% after modest results.
