Japan’s Nikkei share average shook off early disappointment over a smaller-than-anticipated rate cut in China to rise 1% on Monday, as the stock benchmark rebounded from last week’s steep losses.
The Nikkei finished the morning session up 0.95% at 31,748.88, just off the session high.
Last week, the Nikkei slumped 3.15%, its worst weekly performance this year.
The broader Topix rose 0.7% in Monday’s morning session.
“A Chinese financial crisis should basically be China’s problem, unless real-estate sector troubles spread to the banking sector,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui DS Asset Management.
“Of course China and the U.S. are sources of uncertainty, so I would say our stance right now is very cautiously optimistic” on Japanese stocks, Kichikawa added.
“If U.S. long-term yields stabilize around current levels, that is not very disadvantageous to Japanese equity markets.”
Federal Reserve policymakers kick off their annual symposium in Jackson Hole, Wyoming, on Thursday, with Chair Jerome Powell delivering a speech on Friday.
The U.S. 10-year yield currently sits around 4.28%, not far from last year’s nearly 10-month peak of 4.328%.
Among the Nikkei’s 225 components, 196 rose versus 28 that fell, with one flat.
Tokyo Electric Power Co led gainers with a 5.27% surge, making utilities the Nikkei’s best performing sector. Japanese Prime Minister Fumio Kishida is meeting with fishermen to clear the final hurdle to releasing radioactive water from the company’s wrecked Fukushima plant.