Overbought Japan Bourse Nonetheless Called Higher On Wednesday

(RTTNews) - The Japan stock market had moved higher in five consecutive sessions, advancing more than 2,480 points or 6 percent along the way. The Nikkei 225 now sits just beneath the 42,720-point plateau and it has a positive lead again on Wednesday.

The global forecast for the Asian markets is upbeat on an improved outlook for interest rates. The European markets were mixed and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The Nikkei finished sharply higher on Tuesday with gains across the board, especially among the financial shares, technology stocks and automobile producers.

For the day, the index surged 897.69 points or 2.15 percent to finish at 42,718.17 after trading between 42,083.58 and 42,999.71.

Among the actives, Nissan Motor advanced 1.20 percent, while Mazda Motor strengthened 1.51 percent, Toyota Motor accelerated 2.96 percent, Honda Motor rallied 2.61 percent, Softbank Group soared 6.92 percent, Mitsubishi UFJ Financial spiked 4.41 percent, Mizuho Financial collected 3.32 percent, Sumitomo Mitsui Financial improved 3.14 percent, Mitsubishi Electric gained 1.44 percent, Sony Group dipped 0.08 percent, Panasonic Holdings added 0.92 percent and Hitachi climbed 1.54 percent.

The lead from Wall Street is firm as the major averages opened higher and continued to accelerate as the day progressed, ending near session highs.

The Dow surged 483.52 points or 1.10 percent to finish at 44,458.61, while the NASDAQ rallied 296.50 points or 1.39 percent to close at a record 21,681.90 and the S&P 500 climbed 72.31 points or 1.13 percent to end at 6,445.76, also a record.

The strength on Wall Street followed the release of the Labor Department's closely watched report on consumer price inflation for July, which was in line with expectations.

Despite the faster than expected annual core price growth, traders seem to believe the data increases the chances the Federal Reserve will lower interest rates next month.

Following the release of the report, CME Group's FedWatch Tool is indicating a 94.4 percent chance the Fed will cut rates by a quarter point in September.

Crude oil prices slumped on Tuesday ahead of an upcoming meeting between the U.S. and Russian presidents on Friday in Alaska. West Texas Intermediate crude for September delivery was down $0.88 or 1.38 percent at $63.08 per barrel.

Closer to home, Japan will see July numbers for producer prices later this morning, with forecasts suggesting an increase of 0.2 percent on month and 2.5 percent on year. That follows the 0.2 percent monthly decline and the 2.9 percent yearly gain in June.