Nikkei Slightly Higher, Auto & Pharma Stocks Gain
Japanese stocks rallied on Monday, with the Nikkei rising 0.4% to 53,534.49. The main driver came from a weaker yen, which made the profit prospects of exporting companies look more attractive.
A weaker yen is usually a tailwind for Japanese companies, as overseas earnings can appear larger when converted to yen. Today, USD/JPY was at 154.92, up from 153.89 at the Tokyo close on Friday—and the market immediately responded with a positive bias.
The automotive sector led the gains, reflecting optimism that a weaker yen could help the performance of companies that sell heavily overseas. Toyota Motor was one of the driving forces, with its shares rising 2.9%.
On the defensive side, the pharmaceutical sector also strengthened—a sign that investors are not going completely risk-on, but are still choosing stocks that are considered resilient. Shionogi shares rose 2.3%, contributing to the market's focus now on the quarterly earnings season. Investors are monitoring earnings releases that can change market mood in a matter of hours, including those from Daiwa Securities Group and Murata Manufacturing, which are scheduled to release results on the same day.
Beyond the yen and earnings, attention is also focused on the direction of economic policy. Sanae Takaichi's economic plans are also being considered by market participants ahead of the February 8th general election, as fiscal/industrial policies can influence sentiment in key sectors.
Essentially, the Nikkei's rise today is driven more by the combination of a weaker yen + earnings expectations than by renewed euphoria. The market appears to be looking for reasons to continue rising, but remains sensitive: if earnings reports disappoint or the yen suddenly strengthens, momentum could quickly change. (asd)
Source: Newsmaker.id
