FX.co ★ Japan Shares Set for Weekly Gains

The Nikkei 225 Index increased by 0.3% to reach 40,034, while the broader Topix Index also advanced by 0.3% to 2,847 during Friday morning trading. This marked the second consecutive session of gains. The rise followed a decrease in headline inflation, which fell to a seven-month low in June, and a reduction in core inflation to a three-month low. These developments fueled optimism that the Bank of Japan (BoJ) might maintain steady interest rates at its forthcoming meeting. The Nikkei achieved its highest level in over two weeks, mirroring a rally on Wall Street on Thursday. This rally was buoyed by positive corporate earnings reports and robust US economic data. Additionally, recent trade agreements between the US, Vietnam, and Indonesia continued to enhance investor sentiment. However, the gains were subdued in anticipation of Japan’s upcoming Upper House election. The market saw particular strength in consumer non-durables and communication stocks. Early beneficiaries included Sumitomo Pharma, which rose by 3.9%, Hitachi, with a gain of 2.9%, and Ebara Corp, which climbed 2.8%. For the week, the Nikkei is poised for a 1.3% increase, recovering from the losses encountered in the previous week.