Tuesday, 02 January 2024 12:17 GMT

Japan's Nikkei rises amid yen weakness, positive momentum on Wall Street


(MENAFN) Japan's Nikkei index saw a notable rise on Monday, reaching the 39,000 mark for the first time since late July, buoyed by a weaker yen and strong gains on Wall Street from last Friday. The index closed up by 0.1 percent, ending the day at 38,700.87 points after climbing to its highest level since July 31 at 39,080.64 points during a session marked by volatility and profit-taking, along with a slight firming of the yen following its earlier dip. Meanwhile, the broader Topix index also showed positive movement, closing with a 0.22 percent gain.

The upbeat performance on Wall Street on Friday was driven by fresh U.S. economic data that bolstered expectations of a modest interest rate cut by the Federal Reserve in September. The U.S. dollar's strength against the yen, following these economic indicators, provided additional support to Japanese equities, particularly benefiting shares of Japanese exporters. These companies tend to gain when the yen weakens because it boosts the value of profits earned in overseas markets once they are converted back into Japanese currency.

Global stock markets had experienced sharp declines earlier in August, largely due to concerns over a potential recession in the world's largest economy. However, recent economic data from the U.S. has led to a more optimistic outlook, suggesting that the American economy may be stabilizing. Investors are now turning their attention to upcoming U.S. labor market data, including the weekly unemployment figures due on Thursday and the nonfarm payrolls for August, which are expected on Friday. These reports will be closely watched for further insights into the state of the U.S. economy and any potential policy moves by the Federal Reserve. 

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