FX.co ★ Japanese Shares Gain on Dovish Fed Bets

The Nikkei 225 Index surged by 1.2% to exceed the 50,100 mark, while the broader Topix Index increased by 0.7% to 3,380 on Thursday. This rise extends the gains from the previous day, influenced by a positive trend in Wall Street, driven by expectations of further interest rate cuts by the Federal Reserve. US stocks saw a rally for the fourth consecutive session overnight, as markets are currently anticipating over an 80% probability that the Fed will slash rates by 25 basis points in the upcoming month, with three additional cuts forecasted by the end of 2026. In Japan, the administration under Prime Minister Sanae Takaichi is purportedly preparing to issue more than 11.5 trillion yen in extra bonds to finance its economic initiative. The rally was primarily led by technology companies, with significant gains made by SoftBank Group, Kioxia Holdings, Fujikura, Advantest, and Lasertec, all advancing between 1.2% and 4.6%. In addition, financial, consumer, and resource-related stocks also recorded positive performance.