TOKYO, – Japanese shares rose on Friday, with higher bond yields buoying banks and insurers and a weaker yen lifting automakers, while investors globally awaited Federal Reserve Chair Jerome Powell’s speech later in the day for hints on the path for U.S. policy.
The broad Topix index was up 0.5% at 3,099.51, as of 0201 GMT, after a three-day losing run.
The more tech-heavy Nikkei was up just 0.1% at 42,636.67, with declines for heavyweights Fast Retailing and Advantest weighing on the overall index.
Insurance was the top performer among the Tokyo Stock Exchange’s 33 industry groupings, gaining 2.3%, followed by a 1.4% advance for banking. Higher bond yields boost the outlook for revenue from investment and lending.
The benchmark 10-year Japanese government bond yield rose to a 17-year peak, tracking an advance in U.S. Treasury yields overnight after strong purchasing manager surveys gave investors more confidence in the resilience of the U.S. economy.
That saw a paring of bets for a quarter-point Fed rate cut next month to 75% from 80% a day earlier, according to LSEG data.
Powell’s speech at the U.S. central bank’s annual Jackson Hole symposium comes after Fed speakers overall struck moderately hawkish stances on Thursday.
Cleveland Fed President Beth Hammack, for example, said she sees no case for imminent policy easing, while Chicago Fed President Austan Goolsbee flagged services inflation as giving him pause on lowering rates.
“Some investors are concerned about rising U.S. interest rates and falling U.S. equity prices stemming from the Fed’s hawkish stance at the Jackson Hole Symposium, and the potential spillover to Japanese equities,” Morgan Stanley MUFG Securities strategists said in a note.
“However, if higher U.S. rates lead to a stronger USDJPY, we think Japanese export-oriented value stocks could serve as a buffer in global equity portfolios.”
The yen weakened to a three-week trough of 148.675 per dollar, boosting the value of overseas revenues at Japanese car makers and other exporters.
Mazda, which is highly dependent on the U.S. market, climbed about 3%. Toyota gained 0.6%.
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