Volkswacht Bodensee - Japanese shares gain on weaker yen after Christmas break

Japan's key Nikkei index was up more than 1 percent in morning trade, after the yen hit 158.08 per US dollar on Thursday evening -- its lowest level in almost six months.

The Nikkei had closed up 1.1. percent on Thursday, boosted by comments from the Bank of Japan chief and share price gains for top-selling automaker Toyota.

"Today's Japanese market is expected to start with an upswing, continuing the upward momentum of the previous day's Japanese market, driven by the weak yen, while the US market was slightly mixed," said Kosuke Oka, an analyst at Monex Securities.

The yen was "marginally stronger" on Friday, Bloomberg reported, after data showed inflation in Tokyo rose for a second month in December.

Other positive figures from Japan showed industrial production declined less than expected in November while retail sales came in higher than estimated last month.

With the country's unemployment rate holding at 2.5 percent in November -- low by international standards but slightly above Japan's pre-pandemic average -- Moody's Analytics said Friday that the data confirmed their view that "employment conditions are wobbly".

Investor attention is now focused "on whether the Nikkei average will expand its rise to recover to the 40,000 points range by the end of the year", added Oka from Monex.

Bank of Japan (BoJ) Governor Kazuo Ueda had bewildered observers last week by suggesting a prolonged pause in the institution's monetary policy tightening, in the face of domestic and international economic uncertainties, which had sent the Japanese currency tumbling.

On Wednesday, Ueda said rates would be "adjusted" if the situation continued to improve on the economic and price fronts, leaving investors without a clear signal on a possible interest rate hike and contributing to the yen's slide.

"With the calendar year winding down and little in the way of tier-one economic data, the market is content mainly to drift until something shakes it from its slumber -- likely a late-year squeeze or perhaps a Trump-driven shift in global economic sentiment," said Stephen Innes from SPI Asset Management, ahead of US President-elect Donald Trump retaking the White House in January.

In New York on Thursday, major indices veered in and out of positive territory in a sleepy post-Christmas session. The broad-based S&P 500 finished down less than 0.1 percent.

Large tech companies that have led the market in much of 2024 mostly took a breather, including Netflix, Tesla and Amazon, which all declined.

In Asia, Hong Kong and Shanghai were down Friday morning.

Seoul dropped about 1.5 percent as South Korea struggles to shake off political turmoil sparked by suspended President Yoon Suk Yeol's martial law declaration that shocked the world early this month.

Sydney, Wellington and Taipei rose.

Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 1.3 percent at 40,065.55 points

Hang Seng: DOWN 0.2 percent at 20,051.15

Shanghai - Composite: DOWN 0.1 percent at 3,394.87

Euro/dollar: DOWN at $1.0409 from $1.0424 on Thursday

Pound/dollar: DOWN at $1.2521 from $1.2526

Dollar/yen: DOWN at 157.59 yen from 158.00 yen

Euro/pound: DOWN at 83.14 pence from 83.19 pence

West Texas Intermediate: FLAT at $69.62 per barrel

Brent North Sea Crude: FLAT at $73.25 per barrel

New York - Dow: UP 0.1 percent at 43,325.80 (close)

A.Kunz--VB