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

SYDNEY, June 3 (Reuters) - Japan's stock benchmark Nikkei
advanced to a more than three-month high on Wednesday, as a
rapidly weakening yen and a so-called fear of missing out, or
"FOMO", from investors boosted automakers and other cyclical
sectors.
The Nikkei average .N225 gained 1.3% to 22,613.76, its
highest closing level since Feb. 21.
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 touched EURJPY=EBS a 4-1/2-month high
of 121.805 yen early Wednesday.
As a soft yen boosts Japanese manufacturers' profits made
abroad when repatriated, automaker stocks attracted buying.
Mazda Motor 7261.T soared 9.1%, while Nissan Motor
7201.T and Subaru 7270.T jumped 7.5% and 6%, respectively.
The broader Topix .TOPX rose 0.7% to 1,599.08, its highest
closing since Feb. 26, with all but five of the 33 sector
sub-indexes on the Tokyo exchange ending firmer.
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 sentiment, the index of Mothers
start-up shares .MTHR retreated 1.2%, after marking a 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, but a sense of
short-term overheating capped gains.
Japan issued a stay-home alert 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