TOKYO: Japan's Nikkei ended at a fresh six-week high on Thursday after the US Federal Reserve signalled it was ready to cut interest rates to support the economy, but gains were capped by a stronger yen.
The Nikkei share average rose 0.6 per cent to 21,462.86 points, extending gains from a 1.7 per cent rise on Wednesday.
The Fed said that it was ready to battle growing global and domestic economic risks, with rate cuts possibly as early as next month.
"The dovish Fed message is supporting sentiment and the market is relieved for now," said Takashi Ito, an equity market strategist at Nomura Securities.
But Ito added that for Japan, a stronger yen would limit the upside. A stronger yen erodes Japanese manufacturers' profits made abroad when repatriated.
The dollar dropped 0.6 per cent to 107.47 yen, its lowest since Jan. 3.
The Bank of Japan kept monetary policy steady on Thursday, as expected, preferring to save its dwindling ammunition.
With the stronger yen hitting exporters, domestic-oriented sectors attracted buying. Real estate shares surged, with Mitsui Fudosan gaining 1 per cent and Mitsubishi Estate soaring 1.5 per cent.
Shippers rallied, after the Baltic dry index, or freight charges, jumped 3.9 per cent. Mitsui OSK Lines surged 2.1 per cent.
The auto sector underperformed, with Read More – Source
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