Japan's Nikkei races to record high, SoftBank leads tech surge
With financial markets reopening after a holiday in Japan on Monday, the stock benchmark caught up with peaks scaled earlier this year by other major global centres.
The Nikkei 225 surged 2.2 per cent to 42,718.172 at the bell, the highest close ever. It touched 42,999.71 earlier in the session, exceeding the previous intraday high of 42,426.77 set on July 11, 2024.
In a roller-coaster ride in 2024, the Nikkei exceeded a record that had stood since 1989 during Japan's bubble economy.
Tokyo's broader Topix gauge has been setting successive record highs since July 24 and also scored a new all-time high on Tuesday, rising 1.4 per cent to close at 3,066.37.
The US Standard & Poor's 500 and MSCI's broadest gauge of global equities have been charting new peaks since June.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
'The Nikkei was not able to hit a record until today because chip-related shares and auto shares dragged on the index,' said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.
'The Nikkei could soon peak as technology shares that led Wall Street's rally have slowed down.'
SoftBank Group soared 6.9 per cent to 14,825 yen, a historic high. The stock has catapulted more than 25 per cent in the past five days and got an added boost after Reuters reported that SoftBank was selecting banks for a US listing of its payments app operator PayPay.
Semiconductor industry heavyweights Advantest and Lasertec jumped 6.3 per cent and 7.1 per cent, respectively.
Global stock markets tumbled after US President Donald Trump's April 2 'Liberation Day' announcement of sweeping tariffs on imports from dozens of countries into the US. Shares have since more than recouped those losses as trade concerns abated and excitement over artificial intelligence (AI) companies soared.
Uncertainty over tariff levels imposed by the US has weighed on shares in Japan, where exports are a key driver for the economy. The US on Thursday promised to amend a presidential executive order to remove overlapping tariffs on Japanese goods.
'The impact of US tariffs seems not as serious as the market had expected,' said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.
'There will be more companies which will revise up their outlooks due to the limited impact of the US tariffs. The yen remains weak, which is also positive for Japanese companies.'
Foreign money has been flooding into the Japanese market of late, but data from the Tokyo Stock Exchange last week indicated those flows may have peaked.
Overseas investors turned net sellers of Japanese stocks and futures for the first time in 16 weeks in the period ending Aug 1. They sold a net 342 billion yen (S$2.9 billion) of shares and futures, a sharp reversal from net purchases of 1.26 trillion yen in the previous week. REUTERS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
Dollar slips further as anticipation mounts of Fed interest rate cut
NEW YORK :The dollar slipped for a second straight session on Wednesday, a day after a U.S. inflation reading increased expectations of a Federal Reserve rate cut next month and renewed pressure from President Donald Trump for lower rates added to the sell-off. The dollar index, measuring the currency against a basket of peers, fell 0.2 per cent to 97.856, its lowest since July 28, extending its 0.5 per cent drop on Tuesday. U.S. consumer prices increased marginally in July, data showed on Tuesday, in line with forecasts and as the pass-through from Trump's sweeping tariffs to goods prices has so far been limited. Investors priced in near certainty the central bank would ease rates next month, according to LSEG data. On Wednesday, Treasury Secretary Scott Bessent called for a "series of rate cuts," and said the Fed could kick off the policy rate easing with a 50 basis point cut. The day before, U.S. President Donald Trump, who has repeatedly criticised Fed Chair Jerome Powell for not easing rates sooner, had added to the pressure on the Fed. White House spokeswoman Karoline Leavitt said that the president was considering a lawsuit against Powell in relation to his management of renovations at the central bank's Washington headquarters. "I think there is quite significant pressure on the Fed from the political side of Washington to get moving on interest rates," Shaun Osborne, chief currency strategist at Scotiabank, said. Michael Pfister, FX analyst at Commerzbank, said these political developments carried echoes of autocratic countries, where heads of statistics agencies or central banks are replaced and critical data series often discontinued or manipulated. "I'm not saying that this will necessarily happen here. But the developments of the last few days and weeks do not exactly fill me with optimism about the future, or the U.S. dollar," Pfister said. Trump also hit out at Goldman Sachs CEO David Solomon, saying the bank had been wrong to predict U.S. tariffs would hurt the economy. Trump questioned whether Solomon should lead the Wall Street institution. RATE CUT RUMINATIONS Atlanta Federal Reserve President Raphael Bostic on Wednesday said nearly full U.S. employment offers the central bank the "luxury" of not rushing to make any policy adjustments. Meanwhile, Chicago Federal Reserve President Austan Goolsbeeon Wednesday said the U.S. central bank is grappling with understanding whether tariffs will push up inflation just temporarily or more persistently. The dollar's recent stumble threatens the brief recovery it had made since early July, following a roughly 10 per cent decline in the first half of the year. "We haven't seen anywhere near enough strength for the dollar generally to signal a reversal in what is still a pretty significant bear trend," Scotiabank's Osborne said. The dollar's weakness supported the euro and sterling. The single currency was last up 0.2 per cent to $1.1698, briefly hitting its highest since July 28. Similarly, the British currency rose 0.5 per cent to $1.3567, briefly hitting its highest since July 24. Britain's jobs market weakened again, though wage growth stayed strong, according to data on Tuesday, underscoring why the Bank of England is so cautious about cutting interest rates. The Australian dollar was up 0.2 per cent to $0.6541, while the New Zealand dollar rose 0.3 per cent to $0.5973. The Reserve Bank of Australia on Tuesday cut interest rates as expected, and signalled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum.
Business Times
5 hours ago
- Business Times
Bessent sees Nvidia, AMD China agreements as a model for others
[WASHINGTON] US Treasury Secretary Scott Bessent said the recent deal to allow Nvidia and Advanced Micro Devices (AMD) to resume lower-end AI chip sales to China, on the condition they give the US government a 15 per cent cut of the related revenue, could serve as a model for others. 'I think we could see it in other industries over time,' Bessent said on Wednesday (Aug 13) in a television interview on Bloomberg Surveillance. 'Right now, this is unique, but now that we have the model and the beta test, why not expand it?' Bessent credited President Donald Trump with the 'very unique solution' of allowing Nvidia to expand in China and become a bellwether for Chinese technology, with the US taxpayer getting 'a share of' the reward. The revenue the Treasury receives from the arrangement will go to pay down debt, he said. 'If we could make a substantial debt' repayment, that would then allow for discussions about a programme of sending money to taxpayers, he also said. Asked about reporting that China is urging its companies to avoid the Nvidia H20 processors now allowed for its market, Bessent said 'sure, we can discuss that' with the Chinese. 'But it also tells me that they are worried about the Nvidia chips becoming the standard in China.' China talks On Tuesday, Bessent said that he'd be meeting again with his Chinese counterparts 'within the next two or three months,' speaking on Fox Business. He dismissed the possibility of China emulating other US trading partners in winning tariff relief in return for boosting investments in the US. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up When asked if China could make pledges worth billions of US dollars like Japan, South Korea and the EU have as part of their trade agreements, Bessent said 'my sense is no because a lot of the buyout or the funds from the buyout are going to go to critical industries that we need to reshore and a lot of those need to be reshored away from China.' Whether the industry was semiconductors, rare-earth magnets, pharmaceuticals or steel, 'my sense is that isn't what will happen,' Bessent said in an interview with Fox Business on Tuesday. Tech and AI have been among the most high profile of areas of competition between the world's two biggest economies. President Donald Trump has extended a pause of higher tariffs on Chinese goods for another 90 days into early November, a move that stabilised trade ties between the world's two largest economies while they try to forge an agreement. Chinese companies in sectors such as electric vehicles have opened factories abroad to access new markets, a move that could also help them skirt US tariffs. He also indicated that Washington wanted to see measures from China over an extended period to stem the flow of chemicals used to make fentanyl before lowering duties Trump put in place over the issue. 'We will need to see months, if not quarters, if not a year, of progress on that before I could imagine those tariffs coming down,' he said. BLOOMBERG
Straits Times
7 hours ago
- Straits Times
Japan mulls over exporting used destroyers to S-E Asia allies
Sign up now: Get ST's newsletters delivered to your inbox Japan's Takanami-class destroyer JS Sazanami sail on an anti-piracy mission off the coast of Somalia. TOKYO – Japan is considering the export of used Maritime Self-Defence Force destroyers to South-east Asia, government sources said on Aug 13, in an effort to strengthen security ties with countries in the region where key sea lanes are located. Japan has been studying the export of Abukuma-class ships to the Philippines following a June meeting in Singapore where the countries' defence ministers discussed the matter. Tokyo is also looking at Indonesia and Vietnam as possible export destinations, according to the sources. Japan's principles on the overseas transfer of defence equipment and technology restrict the export of lethal weapons under its war-renouncing Constitution. But Japan eased its strict rules on the overseas transfer of defence equipment in 2024 to allow exports of lethal arms only if they are jointly developed or produced with other nations, with an eye on future sales of a next-generation fighter jet being developed with Britain and Italy. If the ship exports proceed, the Japanese government plans to classify the destroyers as 'jointly developed' products by making specification changes, the sources said, a move that could spark controversy. According to the Defence Ministry, six Abukuma-class destroyers were commissioned between 1989 and 1993, and all are set to be retired and replaced by new types operable by smaller crews, as the Self-Defence Forces have been struggling with a chronic personnel shortage. In its Defence Buildup Programme drawn up in 2022, the government said it will 'decommission vessels that have been in service for a considerable amount of years and have limitations in expandability' at an 'early date', and consider their transfer to 'like-minded countries'. Japan agreed with Indonesia at their defence ministers' talks in January to establish a working-level consultation body on maritime security to strengthen cooperation, while also promoting defence exchanges with Vietnam, including the provision of used Japanese material transport vehicles. Japan and the Philippines, both US allies in Asia, have been deepening security cooperation, sharing concerns over China's assertive maritime posture in the East and South China seas. KYODO NEWS
