TOKYO: Japanese stocks closed higher on Monday, catching the tailwind from a bounce on Wall Street after US Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole symposium allayed market fears of a fast withdrawal of pandemic-era stimulus.
The broad Topix rallied into the close to end at the day’s high of 1,950.14, a 1.11% advance to a more than two-week peak. The Nikkei gained 0.54% to 27,789.29, but off the high of 27,921.55 reached early in the trading day.
“As the Nikkei approached 28,000, sellers came out to take profits,” Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, said.
With Japan struggling to contain a fifth wave of COVID-19 infections and ahead of a ruling party leadership election next month, “investors seem to have adopted a wait-and-see stance” before trying to push the index much higher, he said.
The monthly US jobs report this Friday could also be pivotal in determining how soon the Fed can trim stimulus.
Powell appeared to strike a more dovish tone than many other Fed officials on Friday, refraining from providing a clearer picture regarding the timing of tapering or interest-rate hikes, boosting the S&P 500 and Nasdaq to peaks.
A rally in commodities put domestic commodity-related sub-sectors in two of the top three spots in the Topix, led by a 4.28% jump for Japanese iron and steel companies.
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