TOKYO, (MILLAT ONLINE/APP/AFP) – Tokyo stocks closed
higher Tuesday as the yen fell in response to the US treasury secretary reportedly showing his support for a strong dollar — brightening the profit outlook for Japan’s exporters.
The market also picked up a strong lead from Wall Street which rose in post-holiday trading on Monday, though investors are keeping a wary eye on mounting tensions in the Korean peninsula.
In Tokyo, visiting US Vice President Mike Pence reiterated his country’s commitment to the security of Japan on Tuesday, as North Korea intensified concerns over its weapons programme with a vow to launch missile tests “every week”.
Meanwhile, the dollar rose after the Financial Times reported US Treasury Secretary Steven Mnuchin’s comments supporting a strong greenback.
“As the world’s currency, the primary reserve currency, I think that over long periods of time the strength of the dollar is a good thing,” he told the newspaper in an interview.
His comments came just days after President Donald Trump told the Wall Street Journal that the dollar was “getting too strong”.
But Mnuchin said that the president was making “a factual comment about the strength of the dollar in the short term” and that Washington does not intervene in currency markets.
Toshihiko Matsuno, a senior strategist at SMBC Friend Securities, said “Mnuchin probably intended to make adjustments to Trump’s comments on the currency that went too far.”
“A weaker yen is welcome for investors, and is likely to trigger a buyback of major shares including exporters,” he told Bloomberg News.
A cheaper yen inflates the value of profits earned by Japanese firms abroad.
The dollar rose to 109.05 yen Tuesday from rates in the mid-108 yen range seen before news on Mnuchin’s remarks came out.
Tokyo’s benchmark Nikkei 225 index, which snapped a four-day losing streak on Monday, gained 0.35 percent, or 63.33 points, to close at 18,418.59. The Topix index of all first-section issues rose 0.40 percent, or 5.84 points, to 1,471.53.
Bank Mitsubishi UFJ Financial Group’s shares rose 0.87 percent to 655.9 yen and Sumitomo Mitsui Financial Group gained 0.81 percent to end at 3,847 yen.
Panasonic rose 1.02 percent to 1,234 yen while rival Sony edged up 0.08 percent to 3,456 yen.
Carmakers were mixed with Nissan rising 0.84 percent to 1,019 yen while Toyota finished 0.03 percent lower at 5,757 yen.
Uniqlo operator Fast Retailing, a market heavyweight, rose 0.11 percent to 35,110 yen and tech giant SoftBank climbed 1.60 percent to 7,718 yen.