Tokyo stocks climb in morning after US Fed chief hints at rate cut

This photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) — Tokyo stocks climbed Monday morning, lifted by Wall Street gains late last week as a speech by U.S. Federal Reserve Chairman Jerome Powell fueled hopes that the central bank will cut interest rates soon.

The 225-issue Nikkei Stock Average rose 289.04 points, or 0.68 percent, from Friday to 42,922.33. The broader Topix index was up 10.28 points, or 0.33 percent, at 3,111.15.

The U.S. dollar rebounded to the mid-147 yen zone in Tokyo on speculation of a narrowing interest differential between Japan and the United States following Powell’s speech at the Jackson Hole economic symposium in Wyoming on Friday, dealers said.

At noon, the dollar fetched 147.43-44 yen compared with 146.85-95 yen in New York and 148.60-62 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1695-1699 and 172.42-49 yen against $1.1715-1725 and 172.21-31 yen in New York and $1.1594-1595 and 172.29-33 yen in Tokyo late Friday afternoon.

Stocks were boosted by advances of key U.S. indexes including the Dow Jones Industrial Average, which closed at a fresh record high for the first time in about eight and a half months on Powell’s remarks that risks “may warrant adjusting our policy stance.”

Investors were relieved as they believe an additional rate cut would support the world’s largest economy as it faces concerns over a slowdown in the labor market, brokers said.

The benchmark Nikkei index rose above the 43,000 threshold at one point in the morning, but investors moved to lock in gains.