Japan’s Nikkei 225 Makes Gains, As Asian Markets Deliver Green Day

Japan's benchmark Nikkei 225 led the rally in Asian markets today, surging by 3.41% to close at 36,833.27. The significant gains were partly attributed to the depreciating yen, which has boosted export-oriented companies such as Toyota Motor Corp (TYO: 7203) and Nintendo Co. (TYO: 7974).

Markets in Japan have had a good 2024, with the NI225 having gained 10.65% on a YTD basis, even after accounting for the recent 12%+ pullback from July's highs. The move down in July coincided with a strengthening of the yen, and so it rings true that the softer yen today has also aided Japanese stocks to move back upwards. Big gains in Nvidia and the Nasdaq 100 yesterday have also provided a boost to global sentiment.

In corporate news, Japan's leading business entities, including Nippon Steel (TYO: 5401), voiced apprehensions over “political interference” in the company's proposed acquisition of U.S Steel Corp yet still ended the day 1.75% in the green. A formal letter expressing these concerns was sent to U.S Treasury Secretary Janet Yellen, as the deal's progress remains under scrutiny amidst heightened regulatory oversight.

Looking at other Asian stock markets, there was a largely strong day experienced in the APAC region. Australia's ASX 200 rose by 1.1%, and South Korea's Kospi increased by 2.3%. Meanwhile, Hong Kong's Hang Seng index saw a marginal 1.0% gain, while China's Shanghai Composite index dipped slightly by 0.2% into the close after strong early trading.

Investors are now eyed to the policies of the U.S. Federal Reserve, with expectations set for a cut in the main interest rate at the upcoming meeting. This anticipation stems from a slowing overall inflation rate, which eased to 2.5% in August, signalling potential adjustments to the central bank's approach to tackling inflation.

Today's developments across Asian markets have provided investors with optimism, evidenced by the day's gains and the overarching response to global economic cues. Despite some pockets of political and regulatory concern, such as those expressed by Japan's leading corporations, market dynamics today appear to have taken a positive turn, influenced by the promising signals from Wall Street and adjustments in monetary policy expectations.