Japanese Stocks Surge on Rates
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Photo Credit: Fuseman
Rumors of higher interest rates to boost lending income of Japanese banks cause Japanese stocks to soar, extending advantage gained in May.
The biggest gainer this time is Mitsubishi UFJ Financial Group Inc., which is the largest publicly traded financial institution in Japan.
Sony Corp., emerged stronger following a more than expected US economic growth, while Tokyo Electric Power Co., the largest Japanese utility, increased following the decline of crude oil recently. Aderans Holdings Co. and several other entities under Steel Partners gained momentum following a motion at a shareholder’s instance to get rid of management.
The Nikkei 225 Stock Average reached a high of 214.07, or 1.5 percent. This closed at 14,338.54 in Tokyo trading. Counting from January 10, this was the highest ever as it capped a gain of 2.3 percent this week. We see a 27.51 or 2 percent increase in the Topix index to 1,408.14.
“Investors appear to be shifting their funds from bonds to stocks as an inflation hedgeWith short-term rates likely remaining low, higher longer-term rates will help boost profitability at financial companies,” said fund management head Hisakazu Amano, T&D Asset Management Co., Tokyo.
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