Nikkei rebounds after 5 months of rate cuts in China, boosts rally for game makers

TOKYO, Jan 20 (Reuters) – Japan’s Nikkei stock average rebounded on Thursday from a five-month low, led by Sony and other video game makers after China stepped up easing measures monetary policy to support a slowing economy by lowering a set of key rates.

The Nikkei (.N225) ended up 1.11% at 27,772.93, extending morning gains into the afternoon. About three stocks gained for each one that fell.

The benchmark survived a sharp mid-morning decline, which pushed the index to its lowest intraday level since Aug. 23. China’s surprise interest rate cut initially fueled fears of an economic slowdown, but investors were encouraged by the rally in stocks in the region, market participants said.

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As the housing slowdown persists into 2022 and the fast-spreading Omicron variant dampens consumer activity, many analysts in China expect more easing measures to be needed, although other major economies seem ready to tighten their monetary policies. Read more

On Wednesday, the Nikkei closed below 27,500 for the first time since Aug. 20, with Sony and Toyota Motor posting steep declines.

“The Nikkei has fallen to a level where it looks cheap, prompting investors to come in and buy the dip,” said a market participant at a national securities firm.

Video game maker Konami Holdings (9766.T) rose 6.20% to be the Nikkei’s biggest percentage gainer. Sony (6758.T) added 5.84%, recovering from a nearly 13% drop in the previous session. Nintendo (7974.T) rose 2.8%.

Toyota Motor (7203.T) rose 1.72% after falling 5% in the previous session. SoftBank Group (9984.T) advanced 2.12%.

Retailers also rose, with department store operator Isetan Mitsukoshi Holdings (3099.T) jumping 5.32%, while store operator Uniqlo Fast Retailing (9983.T) rose 1.73% to to be the biggest Nikkei winner in index points.

The broader Topix (.TOPX) rose 0.98%. The Topix growth stock index (.TOPXG) jumped 1.35%, outpacing a 0.63% rise in the value index (.TOPXV).

Japanese chipmakers, however, trailed their US counterparts lower, with Tokyo Electron (8035.T) down 0.45% and Advantest down 1.57%, making them the biggest drag. in index points.

Shippers were the biggest losers, with Kawasaki Kisen (9107.T) dropping 6.51% and Mitsui OSK Lines (9104.T) dropping 5.26% to be the two biggest percentage decliners of the Nikkei.

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Tokyo Markets Team Reports; Editing by Sherry Jacob-Phillips and Uttaresh.V

Our standards: The Thomson Reuters Trust Principles.

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