Japanese stocks rose on the 12th as bond yields climbed and the yen's downward trend intensified, with TOPIX extending its winning streak to six sessions and setting a record closing high. Bank stocks drove the market higher, although caution over U.S. CPI data and BOJ policy remained.
Bonds fell in the market on the 12th, with long-term JGB futures trading lower. The yield on newly issued 5-year bonds rose as high as 2.12%, surpassing the previous high since issuance began in 2000. The yield on newly issued 2-year bonds reached 1.645%, hitting its highest level since 2008 as market pricing of a September BOJ rate hike increased. The yen weakened to the mid-¥159 range against the dollar, down about 0.1% from the New York market close.
TOPIX rose 0.9% to 4139.00, with bank stocks driving the market on expectations of an early BOJ rate hike. A wide range of sectors, including electrical machinery, nonferrous metals, services and chemicals, rose, while trading companies, pharmaceuticals and retail declined. The Nikkei average fell at times but recovered in the afternoon.
Market participants are closely watching the release of U.S. CPI data, and some said expectations of a BOJ rate hike were a factor behind the yen's weakness. Many said auction results and currency movements would be key factors for the market going forward.