Nikkei Recoups Losses as Tokyo Eyes Economic Stimulus

The Japanese equity market reversed previous losses on Tuesday, with the Nikkei 225 Index rising 184.19 points, or 0.66%, to close at 28,128.08. The rally followed a strong performance by U.S. indices overnight and optimism regarding potential diplomatic breakthroughs in the Russia-Ukraine conflict. Market sentiment was further lifted by the Japanese government's announcement of a forthcoming economic package, expected by the end of April. This initiative is specifically designed to mitigate the domestic economic pain caused by the recent weakness of the yen. Major exporters and index heavyweights led the gains. SoftBank Group, Fast Retailing, Honda, and Toyota each saw increases of approximately 2%. In the technology sector, Advantest and Screen Holdings rose nearly 1%, while the banking sector saw mixed but generally positive movement, highlighted by gains in Mitsubishi UFJ Financial. Labor market data provided additional fundamental support. The Ministry of Communications and Internal Affairs reported a seasonally adjusted jobless rate of 2.7% for March, beating the 2.8% forecast. Additionally, the job-to-applicant ratio exceeded expectations at 1.21, and the participation rate reached 61.8%. On the global stage, the U.S. dollar continued to trade in the higher 123 yen range. While equities found footing, energy markets faced significant pressure; West Texas Intermediate crude futures dropped 7% to $105.96 a barrel, driven by concerns over energy demand following fresh lockdowns in Shanghai.