Nikkei reverses course to end higher as yields fall sharply, yen weakens

Economic Times

27-05-2025

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Japan's Nikkei share average reversed early declines to end higher on Tuesday, as a weaker yen and falling yields on super long-dated bonds lifted sentiment.The Nikkei rose 0.51% to close at 37,724.11, after falling as much as 0.3% earlier in the session.The broader Topix rose 0.64% to 2,769.49.Yields on Japanese government bonds (JGBs) fell sharply, extending declines, after Reuters reported that Japan would consider trimming the issuance of super-long bonds in the wake of recent sharp rises in yields for the notes."The market's attention is more on JGB yields now, rather than stocks , and the decline in yields on super-long bonds supports sentiment for equity investors," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.The yields on super-long bonds surged to record levels last week, after a weak auction of the 20-year bonds and on concerns about political jockeying over a government stimulus program.The yen also weakened against the dollar - which typically tends to boost shares of local firms, as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.Technology investor SoftBank Group rose 2.23%, becoming the biggest boost for the Nikkei.Shares of staffing agency Recruit Holdings rose 1.88%, while game-maker Sony also advanced 1.84%.Chip-making equipment maker Tokyo Electron fell 0.69% to drag the Nikkei the most.Drugstore operator Tsuruha Holdings trimmed its early losses to rise 0.53% after shareholders approved its merger with Welcia Holdings, despite opposition from U.K.-based fund Orbis Investment.On the Tokyo Stock Exchange's prime market, 68% of the over 1,600 listed stocks advanced, 26% declined, and 4% remained unchanged.