Japan's Nikkei share gauge rallies as bond market jitters subside
EWJ•Nikkei and Topix rise as yields ease
TOKYO, Aug. 20 (Reuters) - Japan's Nikkei share average rallied on Thursday after U.S. measures to steady its bond market helped restore investor sentiment and demand for riskier assets.
The Nikkei 225 advanced 1.36% to close at 66,216.79. The broader Topix .TOPX rose 1.18% to 4,059.73.
Lower borrowing costs support equities
Long-term borrowing costs from the U.S. to Germany and Japan hit their highest in decades earlier this week, reflecting concerns about ballooning government debt and inflation. The U.S. Treasury announced overnight it will double buyback sizes for long-duration debt, prompting a sharp decline in U.S. yields that also spread to Japan.
"The fall in interest rates is undoubtedly the key factor driving the market today," said Wataru Akiyama, an equities strategist at Nomura Securities. "It is notable that shares and sectors which had previously lagged behind the rise in AI and semiconductor-related stocks are now showing significant gains."
Broad market breadth and notable movers
Breadth was overwhelmingly positive, with 182 of the 225 names higher, 42 lower, and one unchanged.
The largest percentage gainers in the index were Sumitomo Metal Mining 5713.T, up 10.76%, followed by Sumitomo Pharma 4506.T, 8.48% higher, and Kansai Electric Power 9503.T, which gained 8.37%, marking its biggest one-day gain since August 2024.
The biggest losers were Aozora Bank 8304.T, down 3.11%, followed by Ibiden 4062.T, down 2.87%, and Nippon Steel 5401.T, down 2.20%.
