Tokyo Stock Exchange ends up sharply higher, led by a weaker yen

  •   24/03/2020 - 11h22
  •   DEHOUI Lionel

The sun rose on Monday on the financial market with a huge news. You are certainly wondering whether this is good or bad news that would be linked to the health crisis caused by Covid-19. Just know that this is the news that probably made the Asian financial market players smile, more precisely the investors involved in the evolution of the Tokyo Stock Exchange. By the way, the Japanese stock market is on the rise. What you need to know is that the strong rise this morning is supported by a falling yen. On the other hand, the SoftBank Group stock has made progress thanks to the support of an XXL plan of asset disposals as well as share buybacks. Indeed, the Nikkei flagship index gained 2.02% and totalled 16,887.78 points. The Topix extended index also gained 0.68% to 1,292.01 points.

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Tokyo Stock Exchange ends up sharply higher, led by a weaker yen
Image copyright: Dick Thomas Johnson - Flickr

The Japanese context

It should be noted that last Friday, Tokyo Square remained closed as it was a holiday throughout Japan. But there are statements that explain the rise observed on that day. According to AFP broker Shinichi Yamamoto of Okasan Securities, "a relatively cheap yen has encouraged players to buy back shares". This is a well-founded point of view given the current context.

In addition, Japanese investors will also have to deal with the likely postponement of the Olympic Games scheduled to take place this summer in the city of Tokyo. For a long time, this possibility was never mentioned. But since yesterday, the International Olympic Committee (IOC) has been discussing the issue. This morning, Japanese Prime Minister Shinzo Abe acknowledged for the first time that a postponement of the Olympics "may become inevitable" because of Covid-19.


SoftBank Group's Situation

It is necessary to note the spectacular advance of the title of SOFTBANK. Indeed, the giant Japanese group specialising in new technologies recorded a fairly impressive rebound. The rebound is 18.6% to 3.187 yen. The group reaches the maximum allowed on the session in the Japanese capital. Its stock advanced to 4.500 billion yen, or 38 billion euros, after the group published its massive asset disposal plan for the year.

The plan will enable it to reduce its debt and finance a huge share buyback programme. The program was raised on Monday to 2,500 billion yen from 500 billion yen so far. The company is a highly indebted group that had recorded huge losses the previous week with a record plunge of more than 17% on Thursday, raising concerns about its financial strength.


Oil and currencies

It was sounding around 07:15 GMT when a barrel of North Sea Brent fell 2.63% to $26.27. A barrel of U.S. WTI Crude Oil at the same hour had a 1.1% gain to $22.88.

On Monday, one euro is worth 118.24 yen compared to 118.82 yen last Thursday after the Tokyo Stock Exchange closed even though it was 118.53 on Friday at 19:00 GMT. The Dollar was worth 110.20 yen at 07:20am versus 108.65 yen last Thursday. The Dollar was 111.35 yen at the exchange rate on Friday at 19:00 GMT.