Japanese Shares Gain as Yen Heads for Biggest Weekly Drop

Japanese shares climbed for a fifth day on Friday as the yen head for its biggest weekly drop in 16 years.

Topix gained 0.4 percent to 1,316.34 as of 9.56 a.m. in Tokyo, bringing its total gain this week to around 8.8 percent. While the Nikkei 225 Stock Average rose 0.6 percent.

The re-election of Prime Minister Shinzo Abe has substantially restored investors’ confidence and gave Japanese shares much needed boost.

“Fears over the fallout from Brexit have been alleviated thanks to stimulus measures across the world,” said Juichi Wako, a senior strategist for Nomura Holdings Inc. in Tokyo. “The yen has fallen back to the 105 level, which the stock market has yet to price in. Exporter shares especially should be repurchased.”

The yen has so far lost 4.9 percent against the US dollar this week, after details of additional stimulus by the monetary policy committee signals the Bank of Japan is planning to put pressure on the yen.

“Speculation about close policy coordination between the government and the Bank of Japan is putting pressure on the yen to weaken,” said Naoto Ono, an analyst in Tokyo at Ueda Harlow Ltd. “Markets are considerably running ahead on expectations.”

They yen dropped 0.6 percent to 106.12 against the US dollar as of 12:27 p.m. on Friday in Tokyo.