Nikkei rallies in afternoon trade to notch first weekly gain in five

TOKYO: Japan’s Nikkei share average rallied after the lunch break on Friday, turning around after a tepid morning session, to finish with solid gains and snap a four-week losing run.

The Nikkei ended the day up 0.73% at 27,439.99. For the week, it booked a 2.71% advance, its best performance since mid-October, tracking moves in global shares on overall healthy corporate earnings, led by U.S. firms.

Traders took cues on Friday from a rebound in Wall Street futures, buoyed by strong earnings from Amazon.com, pushing concerns about heated inflation and global central bank policy tightening to the background.

Still, financials were the best performing Nikkei sector, jumping 0.90% as bets for more aggressive rate hikes lifted yields and boosted their outlook for revenue.

Tech was the second best performer with a 0.76% advance. Games maker Konami Holdings surged 11.71% following a favourable earnings report, making it the Nikkei’s biggest percentage gainer. Nintendo rose 3.62% and chip giant Tokyo Electron added 1.52%.

Uniqlo store operator Fast Retailing was the biggest winner by index points, registering a 3.56% advance.

The broader Topix rose 0.55% to 1,930.56, extending its gain for the week to 2.86%.

“There are many reasons still to be cautious, but Japanese stocks were sold off quite a bit in January already, making it hard to sell them further at this point,” said a market participant at a domestic securities company.

The Nikkei dropped 6.22% last month, its worst performance since March 2020.

Japanese government bond yields rose to six-year highs on Friday, with that on the five-year note topping 0% as traders ramped up bets the Bank of Japan may succumb to pressure to tighten amid a global shift towards more hawkish central bank stances.

Real estate was the Nikkei’s worst performing sector, dropping 0.69%.

Nippon Sheet Glass was the benchmark’s biggest percentage decliner with an 8.02% drop.

(What’s moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

Download The Economic Times News App to get Daily Market Updates & Live Business News.