Nikkei recovers on higher energy stocks, weaker yen

Japan’s Nikkei index rose on Monday as a jump in oil prices boosted energy-related stocks, while a weaker yen and strong performance by other Asian stocks boosted investor sentiment.

According to Reuters, the Nikkei index closed up 0.77% at 36,026.94 points, returning above the level of 36,000 points after a stumble witnessed at the end of last week. Of the 225 stocks on the Nikkei index, 196 rose and 28 fell. The broader Topix index also rose 1.27% to 2,529.48 points.

Energy-related stocks led gains amid rising oil prices after a drone attack on US forces in Jordan, adding to fears of supply disruptions from the Middle East.

Mining stocks rose 3.74%, with the sector leading gains among 33 sector sub-indices on the Tokyo Stock Exchange, followed by the oil and coal products stocks index, which rose 3.66%.

As for individual stocks, the shares of oil and gas producer Inpex Corp. rose 4.11%, recording the third largest percentage gain on the Nikkei index.

At the same time, the decline in the yen helped companies that export their products, as Honda Motor and Toyota Motor recorded the largest gains among the 30 major stocks on the Topix index, with increases of 3.85 and 3.15%, respectively.

A weaker yen increases the value of Japanese currency profits abroad when companies bring them back to Japan.

The rise in Asian stock markets, led by Chinese stocks, has further strengthened investor sentiment as markets prepare for a busy week that will witness the Federal Reserve’s (US central bank) decision on interest rates and also witness the announcement of companies’ financial results.