The Tokyo Stock Exchange closed clearly in the green on Tuesday, having benefited from the constant weakness of the yen and a return to favor of securities which had underperformed in recent weeks, as the end of the quarter approached. On the other hand, the Hong Kong Stock Exchange stagnated (-0.02% around 06:35 GMT), unable to rebound after falling over the three previous sessions. In Tokyo the flagship Nikkei index gained 0.95% to 39,173.15 points and the broader Topix index was even more vigorous (+1.72% to 2,787.37 points).
“As the end of the quarter approaches, international investors are rebalancing their portfolios, selling assets that have performed well recently and buying lagging securities”, commented Hideyuki Ishiguro, chief strategist at Nomura Asset Management cited by the Bloomberg agency. This notably benefited Japanese financial stocks on Tuesday.
The dollar also continues to flirt with the 160 yen mark, an extremely low level for the Japanese currency which offers a favorable wind to Japanese export stocks and to foreign investors to buy Japanese shares at a low price. The Japanese government intervened in the foreign exchange market at the end of April when the dollar crossed 160 yen.
But despite repeated warnings from the Japanese Finance Ministry in recent days, many analysts believe that Tokyo’s next intervention is not that imminent. “The Japanese authorities are not targeting a particular price level between the dollar and the yen” but want “prevent excessive speculation and ensure that yen movements are not disconnected from economic fundamentals”recalled Michael Brown, strategist at Pepperstone, in a note.
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Furthermore, to try to maximize the impact of an intervention, Japan has every interest in acting at a time when the market does not expect it, according to Mr. Brown. Around 06:30 GMT the yen appreciated slightly against the dollar, which was worth 159.48 yen against 159.62 yen Monday at 9:00 p.m. GMT. The euro fell to 171.18 yen, against 171.33 yen the day before, while remaining stable against the greenback, at 1.0733 dollars. The oil market was sluggish: around 06:25 GMT the barrel of American WTI stagnated (-0.01% to 81.62 dollars), as did the barrel of Brent from the North Sea (-0.03% to 85.98 dollars). ).
