Japanese Market Sharply Higher

The Japanese stock market is sharply higher on Thursday, extending the slight gains in the previous sessions, with the benchmark Nikkei 225 moving above the 28,900 level, following the broadly positive cues overnight from Wall Street, as traders digested the U.S. Federal Reserve’s monetary policy announcement, with the Fed deciding to boost the pace of reductions to its asset purchases program and hike interest rate.

The benchmark Nikkei 225 Index is gaining 453.92 points or 1.59 percent to 28,913.64, after touching a high of 29,044.51 earlier. Japanese shares ended slightly higher on Wednesday.

Market heavyweight SoftBank Group is losing almost 1 percent, while Uniqlo operator Fast Retailing is gaining more than 1 percent. Among automakers, Toyota is adding more than 1 percent and Honda is edging up 0.2 percent.

In the tech space, Advantest is gaining almost 4 percent, while Screen Holdings is adding more than 2 percent. Tokyo Electron is up almost 2 percent.

In the banking sector, Mitsubishi UFJ Financial is gaining almost 1 percent and Sumitomo Mitsui Financial is edging up 0.4 percent, while Mizuho Financial is flat.

The major exporters are lower. Panasonic and Sony are flat, while Mitsubishi Electric is edging up 0.5 percent and Canon is surging almost 5 percent.

Among the other major gainers, Nissan Motor is gaining more than 5 percent, while Canon, Nippon Yusen K.K. and Olympus are adding almost 5 percent each. Seiko Epson, Kawasaki Kisen Kaisha and Nissan Chemical are up more than 4 percent each, while Mitsui O.S.K. Lines is advancing more than 3 percent each. Kikkoman, Hino Motors, Hitachi, Alps Alpine and Denso are up almost 3 percent each.

Conversely, Shinsei Bank is plunging more than 7 percent.

In economic news, Japan posted a merchandise trade deficit of 954.8 billion yen in November, the Ministry of Finance said on Thursday. That was way short of forecasts for a shortfall of 675 billion yen following the downwardly revised 68.5 billion yen deficit in October (originally a 67.4 billion yen deficit). Exports rose 20.5 percent on year to 7.367 trillion yen, missing expectations for an increase of 21.2 percent after rising 9.4 percent in the previous month. Imports surged an annual 43.8 percent to 8.321 trillion yen versus forecasts for an increase of 40.0 percent and up from 26.7 percent a month earlier.

Meanwhile, the manufacturing sector in Japan continued to expand in December, albeit at a slower pace, the latest survey from Jibun Bank showed on Thursday with a manufacturing PMI score of 54.2.
That’s down from 54.5 in November, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services index eased to 51.1 in December from 52.1 in November, while the composite dipped to 51.8 from 52.5 a month earlier.

In the currency market, the U.S. dollar is trading in the 114 yen-range on Thursday.

On Wall Street, stocks showed a substantial turnaround over the course of the trading session on Wednesday after moving to the downside early in the day reflecting a positive reaction to the Federal Reserve’s highly anticipated monetary policy announcement. The major averages moved sharply higher following the Fed announcement, largely offsetting the pullback seen in the two previous sessions.

After tumbling as much as 1.2 percent in early afternoon trading, the tech-heavy Nasdaq soared 327.94 points or 2.2 percent to 15,565.58. The Dow also jumped 383.25 points or 1.1 percent to 35,927.43, while the S&P 500 surged 75.76 points or 1.6 percent to 4,709.85.

Meanwhile, the major European markets also finished the day mixed. While the U.K.’s FTSE 100 Index slid by 0.7 percent, the German DAX Index edged up by 0.2 percent and the French CAC 40 Index rose by 0.5 percent.

Crude oil futures settled higher on Wednesday after the Energy Information Administration (EIA) said crude inventories in the U.S. dropped by 4.6 million barrels last week. West Texas Intermediate crude oil futures for January ended up by $0.14 or 0.2 percent at $70.87 a barrel.

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