Japan Stocks Advance on European Rates Outlook, Weaker Yen

Bloomberg, (5/7) -- Japanese shares rose, with the Topix index heading for its third week of gains, after the yen weakened and European policy makers signaled they will keep borrowing costs low. The Topix added 0.7 percent to 1,179.56 as of 9:50 a.m. in Tokyo. The Nikkei 225 Stock Average climbed 1.1 percent to 14,178.77. Japan has outperformed all major equity markets this year on optimism Prime Minister Shinzo Abe will succeed in beating deflation. Abe is expected to push through economic reforms after winning upper-house elections on July 21. “There is some more upside to the Japanese market ahead of the upcoming elections,” said Masahiko Ejiri, a Tokyo-based senior fund manager at Mizuho Asset Management Co., which oversees the equivalent of $34 billion. “We’re pretty confident Abe will win the election, enabling him to further transform the economy. The weaker yen should be helping Japanese exporters.” Both the Topix and Nikkei 225 are heading for an advance of at least 3.5 percent this week as the yen’s weakness beyond 100 per dollar boosts the earnings outlook for Japanese exporters. Shares also gained after European Central Bank President Mario Draghi pledged to keep interest rates at a record low for an “extended period” yesterday, while Bank of England chief Mark Carney said increases in market rates weren’t warranted.

Written by: Kontak Perkasa Futures

PT.Kontak Perkasa Futures, Updated at: 9:10 AM