In the Tokyo stock market on the 27th, the bank stock index Tokyo Stock Price Index (TOPIX) rose for the third consecutive day, reaching its highest intraday price since June 2008. The consumer price index (CPI) for January, published before the start of trading on the day, showed a growth rate that exceeded market expectations, raising expectations that the Bank of Japan would review its easing policy.
Consumer prices maintained the Bank of Japan’s 2% target level for 22 consecutive months, supporting normalization
Mitsubishi UFJ Financial Group temporarily rose 2.3% from the previous day, the highest in 17 years. Major bank stocks were broadly higher, with Mizuho Financial Group up 2.7% and Sumitomo Mitsui Financial Group up 3.4%. Bank stocks have contributed the most to pushing the TOPIX up.
Domestic interest rates rise following the release of price indicators. The yield on two-year government bonds has risen to the highest level since July 2011, amid concerns that the Bank of Japan will make early policy adjustments.
Two-year government bond yields hit 13-year high, raising expectations for Bank of Japan policy review
Yasuhiko Hirakawa, general manager of Rakuten Investment Management’s Second Investment Division, notes that there are many bank stocks with price-to-book ratios (PBR) of less than 1, and that the decline in cross-shareholdings has been slow. There is a possibility that the Bank of Japan will raise interest rates several times, and given that expectations are likely to rise, “there is no sense of overheating yet,” he said.
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