Tokyo stocks close higher on hopes for new government

TOKYO: Tokyo stocks closed higher on Tuesday with investors encouraged by progress in Japan's vaccine drive and hopes for economic stimulus under a new government.

The benchmark Nikkei 225 index ended up 0.73 percent or 222.73 points at 30,670.10, a 31-year high, while the broader Topix index gained 1.01 percent or 21.16 points to close at 2,118.87.

"The fact that over 50 percent of Japan's population has had a second vaccine shot, and expectations that a new government will bring fresh economic stimulus continued supporting the market," said Chiyo Takatori, a strategist at Daiwa Securities.

So far, three candidates have announced they will run for leadership of the ruling Liberal Democratic Party in its September 29 vote. The winner will lead the party into general elections in October or November.

The candidates include Taro Kono, a former foreign and defence minister who heads Japan's vaccine rollout and is the frontrunner in public support.

Tokyo stocks close higher

A report that Shigeru Ishiba, another popular politician, will support Kono is boosting market sentiment, Okasan Online Securities said earlier Tuesday.

"A combination of these two popular figures could lead to a landslide for the LDP in the general election" due later this year, Okasan said in a note.

Looking ahead, investors are awaiting the US consumer price index due later in the day, analysts added.

The dollar fetched 110.08 yen in Asian trade, against 110.01 yen in New York late Monday.

Phone carrier KDDI rallied 3.22 percent to 3,845 yen after the firm said it will use SpaceX's Starlink satellite network to provide better mobile internet access in remote areas, and as a brokerage firm revised up its evaluation.

Nissan ended up 2.89 percent at 578.6 yen and its alliance partner Mitsubishi Motors gained 2.11 percent to 290 yen after a report said the two firms will share manufacturing parts for vehicles sold in Japan, in cost-cutting efforts.

Hitachi ended up 0.93 percent at 6,697 yen after the engineering firm announced a goal to achieve carbon neutrality across its supply chain by fiscal 2050.