Nikkei rallies to fresh 3-month high; weaker yen lifts auto shares

SYDNEY, June 3 (Reuters) - Japan's stock benchmark Nikkei
advanced to a new three-month high on Wednesday as a rapidly
weakening yen and investor fear of missing out a rally boosted
automakers and other cyclical sectors.
The Nikkei average .N225 gained 1.2% to 22,581.74 by the
midday break, after touching its fresh intraday high since Feb.
25 earlier in the session.
The yen rapidly weakened overnight against both the U.S.
dollar and the euro, on optimism the worst of the economic
downturn from the COVID-19 crisis is over as well as on hopes of
additional support from the European policymakers. The dollar/yen JPY=EBS hit a two-month high of 108.850
yen, while the euro/yen hit EURJPY=EBS a 4 1/2-month high of
121.805 yen on early Wednesday.
As a soft yen boosts Japanese manufacturers' profits made
abroad when repatriated, automaker stocks attracted buying.
Mazda Motor 7261.T jumped 6.8%, while Subaru 7270.T and
Nissan Motor 7201.T surged 5.8% and 5.2%, respectively.
The broader Topix .TOPX rose 0.6% to 1,597.18 by the
midday recess, with all but six of the 33 sector sub-indexes on
the Tokyo exchange trading higher.
Highly cyclical non-ferrous metals .INFRO.T , transport
equipment .ITEQP.T and rubber products .IRUBR.T were the
three top-performing sectors on the main bourse.
Bucking the overall market, the index of Mothers start-up
shares .MTHR retreated 1.9%, after marking its fresh 1
1/2-year high earlier in the session. Analysts said the market has been surprisingly resilient to
negative news both domestic and international.
In Japan, the Tokyo government issued a stay-home alert on
late Tuesday as the country's capital recorded 34 new
coronavirus cases, the highest since early May. Meanwhile, U.S. President Donald Trump has threatened to use
the military to quell spreading protests against racism and
police brutality, but Wall Street stocks rallied on Tuesday,
reflecting the global investor optimism. .N