Japan’s Nikkei 225 index soared on Tuesday after leading Asia Pacific stocks to losses on Monday. The index jumped 3.10%. Other Asian Pacific stocks such as Australia’s ASX 200 index rose 1.71%. Hong Kong’s Hang Seng index traded almost flat. Mainland Chinese stocks, Shanghai Composite and Shenzhen Component also gained.
Japan’s Economic Outlook
Investors are on the lookout for US inflation numbers. Fears of increased interest rates earlier than expected are hovering the markets. The Federal Reserve’s announcement on Wednesday last week saw many stocks tumble down. Nikkei 225 index fell sharply.
The Fed announced that they will be considering introducing two interest rate hikes earlier than expected. This saw the US stocks and long-term treasury yields fall. Investors are awaiting Jerome Powell’s speech later in the day. he will be expected to brief on the Fed’s asset purchase programs and its emergency lending programs.
The US dollar hit a 1.9% high last week Wednesday after Fed’s announcement. However, on Monday, the US dollar lost momentum and dropped. The dollar was trading at ¥110.00 on Monday. This was after St Louis Fed chair, James Bullard, announced that with a rise in inflation, the Fed might consider tapering its monetary policy as early as next year.
According to Japan’s lead adviser in semiconductor energy, Japan is expected to contribute ¥1 trillion towards chip development to revive its national industry. Chip shortages have caused a clampdown in global production. This has seen many countries such as China, Japan and the United States beef up domestic supply.
According to a report released this month, the Japan Trade ministry said that it would treat boosting growth in the semiconductor industry as a national project. The ministry also plans to set domestic manufacturing bases that could include co-operative ventures with overseas chip industries.
Nikkei 225 Movers
Transport companies led the gains in the Nikkei 225 index. Kawasaki Kisen Kaisha was the best performer in the Nikkei 225 index. The transportation company gained 10% in its stock earnings. This was boosted by an increase in global commodity prices.
Nippon Yusen K.K, followed closely behind with a 9.87% gain in its share prices. This was after the shipping company, joined the ammonia transport market recently.
Mitsui O.S.K Lines, gained 9.77% in its stock prices. This was shortly after the company announced a $1.5 billion forecast in the companies gains.