off-the-wire

Japanese stocks end higher as energy shares rise tracking oil prices

Kitco Media
By Reuters
Published:
Updated:
Reuters
TOKYO, April 3 (Reuters) - Japanese stocks closed higher on Monday, tracking Wall Street's strength at the end of last week, underpinned by gains in energy-related shares after oil prices jumped on a surprise production cut by OPEC+. The Nikkei share average rose 0.52% to close at 28,188.15, while the broader Topix climbed 0.71% to 2,017.68. Wall Street rallied more than 1% on Friday and the Nasdaq notched its biggest quarterly percentage gain since June 2020, as signs of cooling inflation bolstered hopes that the Federal Reserve might soon end its aggressive interest rate hikes. In Japan, energy explorers jumped 4.97% to lead gains in the Tokyo Stock Exchange's 33 industry sub-indexes.


Oil prices climbed about $5 a barrel, jolted by a surprise announcement by OPEC+ to cut production further in an effort to support market stability. Oil refiners advanced 3.67%. Oil and gas explorer Inpex jumped 5.51% and top oil refiner Eneos Holdings rose 3.25%.


The Nikkei's recent rally comes after last month's declines when investors hedged against risks of a possible global financial crisis, said Makoto Kikuchi, chief executive officer at Myojo Asset Management. The Nikkei has rebounded from a near-two-month low on March 16 as worries about a financial crisis eased. But rising borrowing costs could affect financing for low-rated companies in the United States and Europe, leading to an economic slowdown, said Kikuchi. "If that happens, Japanese companies would be affected," he said. Meanwhile, heavyweight chip-related firms fell, capping the Nikkei's gains. Advantest lost 4.23% to become the worst performer on the Nikkei. Tokyo Electron lost 2.06% and Screen Holdings fell 3.09%.


(Reporting by Junko Fujita; Editing by Subhranshu Sahu and Sohini Goswami)

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