Nikkei rallies to over 3-month high; weaker yen lifts auto shares

  • Reuters
  • Stock Market News
Nikkei rallies to over 3-month high; weaker yen lifts auto shares
Credit: © Reuters.

SYDNEY, June 3 (Reuters) - Japan's stock benchmark Nikkei advanced to a more than three-month high on Wednesday, as a rapidly weakening yen and a so-called fear of missing out, or "FOMO", from investors boosted automakers and other cyclical sectors.

The Nikkei average .N225 gained 1.3% to 22,613.76, its highest closing level since Feb. 21.

The yen rapidly weakened overnight against both the U.S. dollar and the euro, on optimism the worst of the economic downturn from the COVID-19 crisis is over as well as on hopes of additional support from the European policymakers. dollar/yen JPY=EBS hit a two-month high of 108.850 yen, while the euro/yen touched EURJPY=EBS a 4-1/2-month high of 121.805 yen early Wednesday.

As a soft yen boosts Japanese manufacturers' profits made abroad when repatriated, automaker stocks attracted buying.

Mazda Motor 7261.T soared 9.1%, while Nissan Motor 7201.T and Subaru 7270.T jumped 7.5% and 6%, respectively.

The broader Topix .TOPX rose 0.7% to 1,599.08, its highest closing since Feb. 26, with all but five of the 33 sector sub-indexes on the Tokyo exchange ending firmer.

Highly cyclical non-ferrous metals .INFRO.T , transport equipment .ITEQP.T and rubber products .IRUBR.T were the three top-performing sectors on the main bourse.

Bucking the overall market sentiment, the index of Mothers start-up shares .MTHR retreated 1.2%, after marking a fresh 1-1/2-year high earlier in the session. said the market has been surprisingly resilient to negative news, both domestic and international, but a sense of short-term overheating capped gains.

Japan issued a stay-home alert late Tuesday as the country's capital recorded 34 new coronavirus cases, the highest since early May. U.S. President Donald Trump has threatened to use the military to quell spreading protests against racism and police brutality, but Wall Street stocks rallied on Tuesday, reflecting the global investor optimism. .N

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