Stimulus Hopes Keep Lifting Japan Stocks

Stocks in Japan rose for their sixth straight session Tuesday amid continued expectations that the Bank of Japan will soon roll out stimulus for the economy.

The Nikkei Stock Average traded up 0.5%, as trading resumed following a holiday the previous day. The benchmark gained 9.2% last week.

But elsewhere in Asia, shares mostly weakened with Chinese stocks in Hong Kong down 1%. The Hang Seng Index fell 0.8%, and South Korea's Kospi and Shanghai Composite Index were both down 0.5%. Australia's S&P ASX 200 slipped 0.1%.

In Japan, "we see locals buying the dollars and selling the yen," said Tareck Horchani, a senior sales trader at Saxo Capital Markets in Singapore, adding that the trend had likely accelerated in the run-up to yesterday's news that SoftBank Group Corp. was making a $32 billion bid for U.K.-based chip-designed ARM Holdings PLC using sterling.

Shares of SoftBank plunged nearly 11% on Tuesday in reaction to the news, but the forex market is supporting the overall Japanese market, as the banks funding the deal put pressure on the yen, explained Mr. Horchani.

A weaker Japanese yen helps the competitiveness of Japanese exporters that pay costs at home.

Market sentiment in Asia was turning a bit more cautious with central bank meetings this week, including the European Central Bank's on Thursday.

Earlier Tuesday, Australia's central bank left the door open to a further cut in interest rates next month.

In South Korea, shares were off after news that North Korea test fired three missiles as well as data that the country's producer price index deflation narrowed to 2.7% in June from 3.1% in May.

Kenan Machado contributed to this article.

Write to Chao Deng at [e-mail]

(END) Dow Jones Newswires

July 18, 2016 23:35 ET (03:35 GMT)

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