Japan Stocks Rise First Time in Three Days to Join Global Rally

  • Yen weakens against dollar, boosting outlook for exporters
  • Oil rebounds as investors await Fed decision on U.S. rates

Japanese stocks rallied from a two-month low after the yen weakened and global equities jumped following a rebound in oil prices and as investors await the first U.S. interest-rate increase in almost a decade.

The Topix index added 2.5 percent to 1,540.72 at the close in Tokyo, its the first gain in three days and steepest increase since Sept. 30. All but one of its 33 industry groups rose, led by brokerages and automakers. The Nikkei 225 Stock Average surged 2.6 percent to 19,049.91. The yen slid 0.2 percent to 121.86 per dollar after slipping 0.5 percent on Tuesday, boosting the outlook for export earnings.

“Oil was the epicenter of risk-off markets. Crude has now improved and the yen dropped,” said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo. “For investors, the Fed decision is very important.”

Topix Sector Moves
Topix Sector Moves

Toyota Motor Corp., the world’s biggest carmaker, jumped 3.9 percent, to be the largest contributor to gains on the Topix. Mobile phone carrier NTT Docomo Inc. surged 6.5 percent to lead gains on the Nikkei 225, while rival KDDI Corp. jumped 5.1 percent. Oil explorer Inpex Corp. added 2.8 percent, its best advance in more than a month. Japan Airlines Co. sank 2.3 percent after Agence France-Presse reported the carrier will suspend flights between Tokyo and Paris on lower demand following last month’s terrorist attacks in the French capital.

U.S. Futures

E-mini futures on the Standard & Poor’s 500 Index rose 0.3 percent after the underlying measure climbed 1.1 percent on Tuesday, capping its first back-to-back gains in more than a month as energy companies led a rally with crude oil. West Texas Intermediate rose 2.9 percent, adding to Monday’s 1.9 percent gain.

Financial shares increased in New York as concern over turmoil in high-yield bonds abated, and banks rallied on the eve of what most believe will be the end of the Fed’s zero interest rate policy. The Stoxx Europe 600 Index surged 2.9 percent, the most in 10 weeks.

Traders are pricing in 76 percent odds that the Fed will raise rates for the first time since 2006 on Wednesday. Tightening policy would solidify the Fed’s divergence from other major central banks, with policy makers in Europe and Japan still emphasizing measures to support growth. 

U.S. data on Tuesday reinforced expectations for a gradual increase in rates, with the cost of living holding steady in November, underscoring scant inflation that is well below the Fed’s goal.

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