Tokyo stocks end higher as weaker yen lifts exporters

This May 7, 2020 file photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) — Tokyo stocks ended higher Wednesday as exporter shares were bought on a weaker yen, with investors hoping for progress in Japan-U.S. tariff talks before the new 25 percent rate takes effect on Aug. 1.

The 225-issue Nikkei Stock Average gained 132.47 points, or 0.33 percent, from Tuesday to 39,821.28. The broader Topix index finished 11.62 points, or 0.41 percent, higher at 2,828.16.

On the top-tier Prime Market, gainers were led by oil and coal product, mining and securities house issues.

The U.S. dollar briefly rose to the lower 147 yen range in Tokyo, as U.S. long-term interest rates climbed amid waning expectations for a Federal Reserve rate cut, with higher inflation from U.S. tariffs seen as a key factor, dealers said.

Stocks were lifted by some heavyweight semiconductor-related shares, while export-oriented auto issues were sought on a weaker yen, which increases exporters’ overseas profits when repatriated.

The market advanced for the second consecutive day after U.S. President Donald Trump announced plans to impose a 25 percent tariff on imports from Japan, setting an extended negotiation deadline of Aug. 1.

“The 25 percent tariff rate is much lower than 30 or 35 percent floated earlier by President Trump, leading to a sense of relief in the market, and the government has room for further negotiations,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.

However, Ichikawa said the market lacks momentum to lift the Nikkei above the key 40,000 line as the Japanese government may not have sufficient time to engage in the tariff talks, with the House of Councillors election looming on July 20.