Tokyo shares opened higher Tuesday as investors monitored the yen’s relative strength ahead of corporate earnings season, which starts later this month.
The benchmark Nikkei index rose 0.37 percent, or 121.09 points, to 32,512.35, while the broader Topix index added 0.38 percent, or 8.49 points, to 2,247.59.
The positive start came as the Tokyo market returned from a national holiday and attempted to catch up with New York shares, which advanced Monday with the Nasdaq rising 0.9 percent.
The market is focused on the next meeting of the Federal Reserve to see whether the US central bank would stop its rate hikes in the future as speculated.
The market is also monitoring the yen’s relative strength against the dollar, online brokerage Monex said in a note.
“The Tokyo market is expected to remain cautious with the dollar-yen rate moving in the 138-yen range,” it said.
The dollar stood at 138.71 yen, nearly flat from 138.70 yen in New York but lower from 140.74 yen seen in Tokyo a week ago.
The US rate hikes and the Bank of Japan’s easy money programmes have made the yen-denominated assets less attractive and have driven down the value of the yen.
The yen’s weakness also often weighs on the Tokyo market as it makes Japanese exports relatively less competitive overseas.
Still, hopes are high for further improvement of Japanese corporate earnings as businesses regain normality after the end of strict Covid rules.
Domestic demand is recovering, thanks partly to the return of international tourists, Rakuten Securities said in a note.
“Our view is that Tokyo shares will continue their upswing unless the US economy takes a hard-landing and experiences a rapid slowdown,” the brokerage said.
Among major shares, Toyota rose 1.15 percent to 2,243.5 yen. SoftBank Group added 0.35 percent to 6,979 yen.
Sony Group rose 1.90 percent to 13,115 yen after X-Box producer Microsoft said it will keep releasing the popular “Call of Duty” game series on the PlayStation console.
Semiconductor-related shares also increased.
Tokyo Electron, which makes tools to produce chips, jumped 2.58 percent to 20,710 yen. Advantest, which makes tests for semiconductors, rose 2.46 percent to 22,255 yen.