FX.co ★ Japan shares rise on Wall Street Lead, Fiscal Draft in Focus

The Nikkei 225 advanced by 222 points, or 0.4%, reaching 50,630 during Wednesday morning trading, recovering from a lackluster close in the previous session. Investor sentiment improved following the S&P 500’s achievement of a new record high overnight, spurred by alleviated concerns over a potential AI bubble and unexpectedly robust U.S. Q3 GDP figures. Domestically, the emphasis shifted towards fiscal policy as Tokyo finalized plans for a fiscal year 2026 budget projected at approximately JPY 122 trillion, with cabinet approval anticipated as soon as Friday. This draft surpasses the initial FY2025 plan of about JPY 115.2 trillion and would represent a second consecutive year of record-high budgets. Nevertheless, the market gains were tempered by indications that the Bank of Japan intends to continue increasing interest rates, as policymakers consider real rates to be "significantly negative" and financial conditions generally accommodative. Most sectors experienced growth, particularly in industrial services and producer manufacturing. Among the early gainers were Tokyo Electron, rising 2.0%, Japan Post Bank with a 1.9% increase, Daiichi Sankyo up by 1.5%, and Advantest advancing by 1.4%.