Japan's Nikkei rises on Wall Street gains, despite firm yen

Japan's Nikkei share average rose on Thursday, tracking overnight gains in Wall Street, even as the yen firmed on the back of bolstered expectations that the Bank of Japan (BOJ) will continue to raise interest rates.

The Nikkei closed up 0.6% at 39,066.53, while the broader Topix finished 0.3% higher at 2,752.2.

All three major U.S. stock indexes rose on Wednesday as investors brushed off disappointing Alphabet earnings and weighed the prospect of future rate cuts from the Federal Reserve.


A strong performance by U.S. tech shares and gains by AI darling Nvidia trickled through to boost Japanese chip-related stocks. Advantest, which counts Nvidia among its customers, rose 1% while Tokyo Electron advanced 2%.

The Nikkei briefly pared gains as the yen climbed as high as 151.81 against the U.S. dollar after Naoki Tamura, one of the BOJ's most hawkish policymakers, said the central bank must raise rates to at least 1% by the second half of fiscal year 2025.

"It was quite a hawkish statement, so that spread the view within markets that the BOJ will continue raising rates, which led to the strengthening of the yen," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

The yen softened somewhat in afternoon trade, however, helping equities to recover some gains.

A stronger domestic currency hurts exporter shares and investor sentiment as it decreases the value of overseas profits when firms repatriate them to Japan.

Among individual shares, the domestic earnings season continued to produce big moves.

Chipmaker Renesas Electronics surged 12.6%, and Japan's biggest brokerage Nomura Holdings gained 3.8%.

Healthcare and imaging company Fujifilm shed 6.6%, while soy sauce maker Kikkoman tumbled 6.1%.

Automaker Honda slid 4%, while Nissan Motor jumped 7.3% amid continued news that Nissan may step back from merger talks.