Japan's Nikkei tracks Wall Street higher as Treasury yields fall

BY Reuters | TREASURY | 09/28/22 11:32 PM EDT

TOKYO, Sept 29 (Reuters) - Japan's Nikkei share average rose on Thursday, rebounding from a near three-month low touched in the previous session, tracking Wall Street's sharp gains overnight that was driven by falling Treasury yields.

The Nikkei gained 0.25% to 26,238.32, by the midday break, after rising about 1% earlier, recovering from a July 1 low of 25,936.36 hit on Wednesday. The broader Topix inched down 0.08% to 1,853.63. "The main driver for the Nikkei's gain was an advance of Wall Street overnight, which was fuelled by the Bank of England's action," said Chihiro Ohta, assistant general manager at the investment research and investor services at SMBC Nikko Securities

Wall Street ended sharply higher overnight following its recent sell-off, after Treasuries yields fell, as the Bank of England stepped into the bond market in an attempt to dampen investor fears of contagion across the financial system.

In Japan, Uniqlo clothing shop owner Fast Retailing (FRCOF) rose 1.63%, becoming the biggest boost to the Nikkei, followed by technology investor SoftBank Group (SFTBF), rising 1.17%.

Drug makers were the top gainer among the Tokyo Stock Exchange's industry sub-indexes, rising 2.53%.

Eisai (ESALF) shares were set to hit their daily limit for a two straight sessions, after the surprise trial success of an experimental Alzheimer's drug developed by the Japanese drug maker and a partner Biogen.

Shionogi & Co (SGIOF) jumped 4.97%, while Chugai Pharmaceutical (CHGCF) gained 3.3% and Daiichi Sankyo (DSKYF) rose 2.23%.

Online shipping platform Rakuten Group (RKUNF) climbing 5.76% and was the top gainer on the Nikkei, followed by motorcycle maker Yamaha Corp (YAMCF), rising 5.22. (Reporting y Junko Fujita; Editing by Rashmi Aich)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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