Nikkei 225 Jumps After Federal Reserve Statement
For much of this week the Nikkei 225 remained relatively unchanged, reaching a high on Wednesday of 15,954.50. However, on Thursday morning the market initially jumped to 16,009.50 before continuing up to 16,094.50.
On Wednesday evening the US Federal Reserve suggested that it will raise interest rates at some point next year. This caused a strengthening of the dollar and weakening of the yen. A weak yen is advantageous to Japanese companies as it gives them a trade advantage. It is this advantage, and expected boost in profits, which caused the Nikkei to rise so rapidly.
However, it wasn’t all good news. Sony plunged 12% after it revised down its earnings outlook for the fiscal year. Nonetheless, with the dollar expected to make further gains in the coming days, it would not be surprising to see the Nikkei 225 reach new highs.