Nikkei 225 Surges as Markets Absorb Federal Reserve Policy Shift

The Nikkei 225 Index rose 453.92 points to close at 28,913.64, extending a multi-session winning streak. The market's upward momentum was largely fueled by positive sentiment from U.S. markets, where the Nasdaq and S&P 500 saw significant gains following the Federal Reserve's latest monetary policy update. Investors reacted favorably to the Fed's decision to increase the pace of its asset purchase tapering and hike interest rates, which provided a catalyst for global risk assets. In Tokyo, the rally was broad-based, though performance varied across sectors. Automotive and tech stocks saw notable gains, with Nissan and Canon both surging nearly 5%. Advantest climbed almost 4%, while Tokyo Electron and Screen Holdings both posted gains of 2% or more. Conversely, the banking sector showed mixed results; while Mitsubishi UFJ Financial gained nearly 1%, Shinsei Bank faced a sharp decline, plunging over 7%. On the macro front, Japan's Ministry of Finance reported a merchandise trade deficit of 954.8 billion yen for November, significantly wider than the forecasted 675 billion yen. While exports grew 20.5% year-on-year to 7.367 trillion yen, they were offset by a 43.8% surge in imports, which reached 8.321 trillion yen. Manufacturing activity remained in expansion territory with a December PMI of 54.2, though it slowed slightly from November's 54.5. The services index also eased to 51.1. In the currency markets, the U.S. dollar remained steady around the 114 yen level.