Nikkei closes up nearly 3% amid global rallies

Tokyo’s key Nikkei index advanced nearly three per cent on Friday as investors cheered rallies on Wall Street, driven by hopes for less aggressive Fed rate hikes due to slowing US inflation.

The Nikkei 225 index ended up 2.98 per cent or 817.47 points to 28,263.57, while the broader Topix index rose 2.12 per cent, or 41.10 points, to 1,977.76.

The Tokyo market rallied after global shares surged as “slower-than-projected inflation galvanised bets the Federal Reserve can downshift its aggressive rate-hike path”, said Stephen Innes of SPI Asset Management.

In New York, the Dow ended up 3.7 per cent, while the Nasdaq surged a whopping 7.4 per cent.

“The ‘relief rally’ in the US market continued” during the Tokyo hours, Daiwa Securities said in a commentary. 

“The ‘inflation trade’ might be coming to its end,” the brokerage said, referring to market jitters over the rising prices and investment moves that reflect those concerns. 

Innes also said the fresh data was seen as “a significant turning point”.

“Although inflation remains at decade highs, at minimum, things are moving in the right direction,” he said.

The dollar remained volatile and on Friday bought 141.55 yen -- off from the day’s high of 142.46 yen but firming from 140.67 yen in New York overnight. 

That level compared with 146.14 yen in Tokyo on Thursday.

Among major shares, Sony Group surged 5.54 per cent to 11,630 yen.