Japan's Nikkei Hits Three-Week High, Gains 27 Points Amid U.S. Rally, BoJ Sells ¥200 Billion

Japan's Nikkei Stock Average reached a three-week closing high on December 3, 2024, driven by a widespread rally, particularly in the technology sector. The index's performance was bolstered by a rebound in U.S. markets, with the Nikkei outperforming as it caught up with Wall Street gains. On December 4, the Nikkei continued its upward trend, gaining 27 points, supported by robust retail sector performance despite a stronger yen acting as a headwind. Analysts noted that the Bank of Japan (BoJ) had sold approximately ¥200 billion ($1.3 billion) of futures-linked 10-year government bonds to enhance liquidity in the market. This move was seen as a response to a shortage of these securities, which are crucial for hedging against market volatility. The BoJ's decision to maintain its current policy stance amid rising political pressure and the absence of significant yen depreciation has also influenced market sentiment.