Japan’s Nikkei share average saw a recovery on Tuesday, rising 1% to 38,482.11 as investors took advantage of lower stock prices after Monday’s sharp decline. The index had fallen 1.8% in the previous session, slipping below the psychologically important 38,000 level for the first time this month.
See: Rebound expected for Nikkei225. Download the VT Markets app.
The broader Topix index also gained, ending 0.58% higher at 2,715.76. Investors showed confidence by buying back stocks, despite a lack of major news to push the market significantly higher or lower.
This activity highlights the market’s sensitivity to sharp movements and investor behavior driven by perceived value opportunities.
Tokyo Electron, a major player in the chip-making equipment sector, provided the biggest boost to the Nikkei, rising 2.7%. TDK, an electronic parts maker, saw a substantial jump of 6.32% after announcing the successful development of materials for all-solid-state batteries with 100 times the energy density.
This breakthrough could have long-term implications for the tech and energy storage sectors, adding optimism to the market.
However, uncertainties about the Bank of Japan’s (BOJ) policy path weighed on investor sentiment, limiting the Nikkei’s advance. At its policy meeting on Friday, the BOJ indicated plans to trim its bond purchases and will announce a detailed plan in July for reducing its nearly $5 trillion balance sheet.
This move introduces a level of uncertainty that the market does not favor, as the extent of bond purchase reductions remains unclear until the next policy meeting.
The BOJ maintained its short-term policy rate target within the range of 0-0.1%, as expected. Given the current macroeconomic data, a rate hike in the near term appears unlikely, adding another layer of cautious optimism to the market outlook.
You might be interested: Yen cautious before BOJ meeting; Euro falters with weekly loss in sight
In the broader market, 165 of the 225 Nikkei components saw gains, while 59 fell, and one remained flat. The pharmaceuticals sector was the worst performer among the Tokyo Stock Exchange’s 33 industry sub-indexes, losing 1.14%.
Investors continue to monitor these developments closely, with the Nikkei’s stability hinging on upcoming BOJ policy decisions and broader economic indicators. This cautious approach reflects the market’s sensitivity to both domestic policy shifts and global economic trends.
Start trading now — click here to create your live VT Markets account.
Official partners:
