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Japan Stocks surge after Fed signals probable rate cut

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Headline indices of the Japan share market advanced on Thursday, 11 July 2019, as risk sentiments underpinned on tracking rallies on Wall Street overnight after Fed Chair Powell signaled in testimony to the House Financial Services Committee that the U. S. central bank could be cutting interest rates soon. Around late afternoon, the 225-issue Nikkei Stock Average was up 0.53%, or 113.33 points, to 21,646.81, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange added 0.56%, or 8.78 points, at 1,580.10.

Total 30 subsectors out of 33 subsectors of the Topix's index inclined, with Mining, Fishery, Agriculture & Forestry Oil & Coal Products, Warehousing & Harbor Transportation Services, Pulp & Paper, and Marine Transportation issues being notable gainers, while Insurance and Securities & Commodities Futures issues were notable losers.

U. S. stocks ended higher on Wednesday and the S&P 500 briefly crossed the 3,000-point mark for the first time following Powell's remarks. The S&P 500 closed 0.5% higher at 2,993.07. The Dow Jones Industrial Average climbed 76.71 points to finish at 26,860.20, while the Nasdaq Composite saw a record close at 8,202.53.

In testimony to the House Financial Services Committee, Fed Chair Powell said business investments across the U.

S. have slowed notably recently as uncertainties over the economic outlook linger. Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened, Powell said in prepared remarks. Powell said the central bank stands ready to "act as appropriate" to support a record-breaking leg of U. S. economic growth. Powell's remarks confirming market expectations for a rate cut at the Fed's two-day meeting ending July 31

Shares of game maker Nintendo jumped more than 3% after the company announced a cheaper version of its Switch video game console.

The insurance sector underperformed the market, after Japan Post Insurance Co plunged more than 6% to hit a record low after the company on Wednesday admitted mismanagement in connection with more than 90,000 insurance policies.

Bandai Namco Holdings was untraded with a glut of buy orders after Nikkei Inc said it will add the stock to the Nikkei 225 average effective Aug. 1, replacing Bandai Namco Holdings. Chiyoda will also be replaced by Takara Bio for the Nikkei 500 Stock Average on Aug. 1.

CURRENCY NEWS: Japanese yen, often seen as a safe-haven currency, was tad higher against greenback on Thursday. The Japanese yen traded at 108.08 against the dollar after strengthening from levels above 108.5 in the previous session

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 11 2019. 10:40 IST