FX.co ★ Japan’s Nikkei Hits 4-Month High

The Nikkei 225 Index saw a 0.9% increase, closing at 38,885 on Wednesday, marking its highest point in four months. This rise came as softer economic data eased expectations of further interest rate hikes by the Bank of Japan. In May, exports dropped for the first time in eight months, impacted by US tariffs, while import figures fell more sharply than anticipated. Additionally, core machinery orders experienced a downturn in April, and manufacturing sentiment weakened in June, raising concerns about domestic demand. These developments supported the Bank of Japan's cautious approach. On Tuesday, the central bank maintained its interest rates and indicated a gradual strategy for balance sheet reduction, stressing the importance of a cautious move towards policy normalization. Technology and consumer stocks primarily drove the market rally, with notable performances from Lasertec (+4.8%), Nintendo (+6.6%), Fast Retailing (+2%), Advantest (+1.2%), and Sanrio (+1.2%).