TOKYO: Japan’s Nikkei share average closed at its highest in 33 years on Monday as gains on Wall Street lifted risk appetite, while investors kept betting on domestic equities on expectations the Bank of Japan would retain its ultra-loose policy.
The Nikkei index jumped 2.2% to end at 32,217.43, its highest close since July 1990 and posted its biggest daily gain since Jan. 18.
The broader Topix advanced 1.7% to 2,219.79. “The market was supported by the gains in the US market on Friday.
That helped keep the money flowing into risk assets in Japan,“ said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
The Japanese equities are in more favorable position than their US peers as the BOJ is expected to maintain ultra low rates. Hence, when US shares rise, there is no reason for not buying Japanese stocks, Kamada added.
The Bank of Japan will hold a two-day policy meeting, starting June 15.
Japanese companies’ ongoing efforts to boost shareholder returns also supported sentiments, Kamada said.
Tokyo stocks recover from losses to end higher
On Friday, US stocks closed higher after a labour market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default.
Among individual stocks in Japan, Uniqlo brand owner Fast Retailing jumped 3.86%.
Chip-testing equipment maker Advantest rose 3.38% and robot maker Fanuc advanced 4.53%.
Chip-making equipment makers, which initially tracked declines in the Philadelphia semiconductor index, reversed course, with Tokyo Electron and Screen Holdings rising 0.75% and 1.9%.
All but one of the Tokyo Stock Exchange’s 33-sector sub-indexes rose, with machineries rising 3.12% to lead the gains.
Shippers rose 2.86%. Utilities slipped 0.6%. Tokyo Electric Power Holdings lost 3.64% to become the biggest loser on the Nikkei.
Comments
Comments are closed for this article.