Tokyo stocks surge on US tech strength and currency dynamics

Tokyo stocks closed higher on Tuesday, driven by positive performances in US tech giants and a weaker yen. The Nikkei 225 index rose by 1.08 percent, or 426.09 points, to reach 39,773.13, while the broader Topix index also saw gains, closing up by 0.97 percent at 2,754.69.

The Japanese market received a boost from the strong showing of US tech shares, coupled with a slight softening of the yen. IwaiCosmo Securities noted that the dollar was trading at 151.88 yen, a marginal increase from previous levels. A weaker yen is advantageous for exporters, with market observers closely monitoring currency fluctuations following statements from Japanese officials regarding potential intervention in case of excessive movements in the currency. Speculation suggests that breaching the 152 level could trigger such intervention.

Investors are eagerly awaiting key US consumer price data scheduled for release on Wednesday, which could significantly influence the Federal Reserve's decision-making ahead of its upcoming policy meeting. While Wall Street closed with minimal changes on Monday, the Nasdaq Composite Index and the Philadelphia Semiconductor Index both recorded slight gains. In Tokyo, semiconductor-related stocks performed well, with Tokyo Electron surging by 3.53 percent to 38,990 yen, Advantest rising by 1.06 percent to 6,031 yen, and Shin-Etsu Chemical climbing by 4.44 percent to 6,467 yen following reports of a new chip materials plant construction. Additionally, Toyota saw a 2.11 percent increase to 3,776 yen, and Nippon Steel added 0.78 percent to 3,630 yen.

In conclusion, Tokyo's stock market exhibited positive momentum on Tuesday, supported by the strength of US tech shares and currency dynamics. With a focus on upcoming economic data releases and potential currency interventions, investors are navigating market conditions cautiously as they await further developments.