Powell 'puts out the fire' on rate cut expectations, yen weakens! Stocks in Japan soar more than 2%

Japanese stocks rose on Thursday after the US Federal Reserve said it would cut interest rates by 50 basis points, but the yen weakened as Fed chairman Jerome Powell later warned that big rate cuts were not guaranteed to continue, with investors now waiting for the Bank of Japan's rate decision on Friday. The Nikkei 225 index rose 2.5 per cent and the Topix index, which tracks the broader market, climbed 2.2 per cent, its highest intraday level since September 4. The yen erased gains it made on the Fed's decision to cut its benchmark rate by 50 basis points, as Mr Powell said in a news conference that the central bank was not in a hurry to loosen policy. The yen traded as high as 140.45 against the dollar before falling to 143.74 by the close. “While the big rate cut was as expected for the Japanese market, the yen did not appreciate, which may be an ideal outcome. With the BoJ expected to keep rates unchanged, attention may be focused on what Governor Kuroda Haruhiko says next,” said Rina Oshimo, senior strategist at Okasan Securities. Economists expect the BoJ to hold its fire when it concludes its two-day meeting on Friday. The Nikkei had fallen into bear territory in early August after the central bank raised rates and Mr Kuroda's hawkish stance in a news conference boosted the yen.