Long-term interest rates rose and the yen strengthened in Japanese markets, while expectations of a rate hike grew ahead of a speech by Deputy Governor Himino (氷見野). Bank stocks rose, and related shares also moved higher on the back of Nvidia's strong earnings.
Long-term interest rates rose, while short-term rates also moved higher, prompting yen buying in the foreign-exchange market. Amid expectations of higher interest rates, medium- and long-term bonds fell, and many market participants said expectations were growing that the Bank of Japan would raise rates.
The yen moved higher, while the dollar held up in response to movements in U.S. interest rates, and the yen remained relatively firm. Market participants said volatility risks would depend on the content of Deputy Governor Himino's (氷見野) speech.
Bank stocks were bought in the equity market, with some shares rising and making a significant contribution to the TOPIX's gains. In the morning, buying initially prevailed on positive sentiment toward Nvidia's earnings, but profit-taking selling later spread across the market. Kioxia Holdings's shares rose after the company announced plans to build a new manufacturing facility in Iwate Prefecture.
Market participants maintained their outlook for a rate hike at the September meeting while watching the comments that follow closely. Many said financial stocks were expected to remain firm as expectations of a rate hike persisted.