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Japan's Nikkei rises on Wall Street gains, despite firm yen
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Japan's Nikkei rises on Wall Street gains, despite firm yen
Feb 5, 2025 11:30 PM

(Updates for market close)

By Brigid Riley

TOKYO, Feb 6 (Reuters) - Japan's Nikkei share average

rose on Thursday, tracking overnight gains in Wall Street, even

as the yen firmed on the back of bolstered expectations that the

Bank of Japan (BOJ) will continue to raise interest rates.

The Nikkei closed up 0.6% at 39,066.53, while the

broader Topix finished 0.3% higher at 2,752.2.

All three major U.S. stock indexes rose on Wednesday as

investors brushed off disappointing Alphabet earnings

and weighed the prospect of future rate cuts from the Federal

Reserve.

A strong performance by U.S. tech shares and gains by AI

darling Nvidia ( NVDA ) trickled through to boost Japanese

chip-related stocks. Advantest ( ADTTF ), which counts Nvidia ( NVDA )

among its customers, rose 1% while Tokyo Electron ( TOELF )

advanced 2%.

The Nikkei briefly pared gains as the yen climbed as high as

151.81 against the U.S. dollar after Naoki Tamura, one of the

BOJ's most hawkish policymakers, said the central bank must

raise rates to at least 1% by the second half of fiscal year

2025.

"It was quite a hawkish statement, so that spread the view

within markets that the BOJ will continue raising rates, which

led to the strengthening of the yen," said Masahiro Ichikawa,

chief market strategist at Sumitomo Mitsui DS Asset Management.

The yen softened somewhat in afternoon trade, however,

helping equities to recover some gains.

A stronger domestic currency hurts exporter shares and

investor sentiment as it decreases the value of overseas profits

when firms repatriate them to Japan.

Among individual shares, the domestic earnings season

continued to produce big moves.

Chipmaker Renesas Electronics surged 12.6%, and

Japan's biggest brokerage Nomura Holdings ( NMR ) gained 3.8%.

Healthcare and imaging company Fujifilm ( FUJIF ) shed 6.6%,

while soy sauce maker Kikkoman ( KIKOF ) tumbled 6.1%.

Automaker Honda ( HMC ) slid 4%, while Nissan Motor ( NSANF )

jumped 7.3% amid continued news that Nissan ( NSANF ) may step

back from merger talks.

(Reporting by Brigid Riley; Editing by Sumana Nandy and Varun H

K)

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