The Nikkei Average rose for a third straight day as bargain hunting spread despite US CPI coming in above market expectations. The long-term interest rate rose to 2.79%.
The Nikkei Average ended Tokyo trading on the 11th at ¥61,248.59, up ¥789.01 from the previous day, for a third straight gain. Selling initially prevailed following the upside surprise in US CPI, but bargain hunting took hold after the results of major US technology companies had been released, enabling the market to recover from the previous day’s sharp drop. Toward the close, the Nikkei Average approached its 200-day moving average.
In the foreign exchange market, dollar-yen traded in the upper ¥158 range. The dollar strengthened against the yen in the morning, while its advance was restrained in the afternoon by caution over coordinated US-Japan intervention. Euro-yen fell from the lower ¥177 range, while euro-dollar declined to around $1.1150.
In the bond market, the December government bond futures contract closed at ¥126.85, down ¥0.83 from the previous day, while the cash long-term interest rate rose to 2.790%. The yield on the newly issued 10-year JGB rose by 10 basis points.
The Bank of Japan’s October money stock M2 rose just 1.7% year on year, slowing from 2.0% growth in the previous month.
Market participants indicated that they were monitoring subsequent price movements as Japanese and US monetary policy and intervention concerns intersected.