Tokyo stocks were mixed Thursday morning, as buying on growing hopes for interest rate cuts in the United States amid cooling inflation was offset by selling of exporters hurt by a firming yen against the U.S. dollar.
The 225-issue Nikkei Stock Average rose 283.84 points, or 0.74 percent, from Wednesday to 38,669.57. The broader Topix index was down 7.19 points, or 0.26 percent, at 2,723.69.
The dollar briefly dipped to the upper 153 yen zone in Tokyo, as U.S. data showing decelerating inflation in April reinforced expectations the Federal Reserve will cut interest rates this year.
At noon, the dollar fetched 154.01-02 yen compared with 154.83-93 yen in New York and 156.09-11 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.0885-0889 and 167.64-71 yen against $1.0879-0889 and 168.54-64 yen in New York, and $1.0825-0827 and 168.97-169.01 yen in Tokyo late Wednesday afternoon.
Stocks shot up from the outset, lifted by record high closes on all three major U.S. indexes overnight after the U.S. CPI for April rose 0.3 percent from a month earlier, slowing from a 0.4 percent increase in March and smaller than market projections, analysts said.
But the data, which fueled hopes for two interest rate cuts in the world's largest economy this year, also caused U.S. long-term Treasury yields to decline and the dollar to weaken versus the yen, adding downward pressure on Japanese stocks, brokers said.
"The stronger yen has led to widespread selling, particularly in automakers and trading companies, as it negatively impacts corporate performance," said Chihiro Ota, assistant general manager of investment research at SMBC Nikko Securities Inc.
Meanwhile, the market was little affected by Japanese gross domestic product data released in the morning, which showed the economy shrank an annualized 2.0 percent in the first quarter of 2024 for the first contraction in two quarters, analysts said.
