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21 February 2024

Japanese shares track Wall Street gains, financials weigh

By Reuters

Japanese shares rose on Monday, tracking Wall Street's strength in the previous session, with heavyweight technology and energy stocks leading the gains, while a pullback in banks and insurers weighed on the market.

The Nikkei share average rose 0.51% to 26,369.77 by the midday break, while the broader Topix inched up 0.11% to 1,900.06, after briefly turning negative.

"Japanese shares rose because U.S. equities gained at the end of last week, but the trading is very quiet with most participants in the U.S. and Europe away for holidays," said Shuji Hosoi, senior strategist at Daiwa Securities.

Heavyweight Uniqlo brand owner Fast Retailing rose 1.66% and chip-making equipment maker Tokyo Electron gained 1.73%. Air-conditioning maker Daikin Industries climbed 1.47%.

The rise in oil prices pushed the oil explorers index up 2.85%, making it the top gainer among the 33 industry sub-indexes on the Tokyo Stock Exchange. Inpex jumped 2.95%.

The crude refiners' index gained 1.37%, with Idemitsu Kosan rising 2.48%.

The banking sector lost 1.25% after surging more than 10% so far this month on expectations for better profits after the central bank last week allowed the 10-year government bond yield to rise up to 0.5% last week, from 0.25%. The 10-year JGB yield was last at 0.380%.

Sumitomo Mitsui Financial Group lost 2.39%.

The insurance sector fell 1.64% to become the top loser among the industry sub-indexes.

"The 10-year government bond yield hovers below the top end of the Bank of Japan's (BOJ) policy band, which prompted a sell-off of banking shares," Hosoi said.

There were 148 advancers on the Nikkei index against 69 decliners.

The volume of shares traded on the Tokyo exchange's main board was 0.47 billion, compared to an average of 1.25 billion in the past 30 days.