TOKYO: Japan’s Nikkei share average rose to a two-week high on Wednesday, lifted by a rally on Wall Street and dovish comments from the country’s central bank chief.
The Nikkei gained about 1% to 32,810.30 by the midday recess, after earlier touching 32,873.15 for the first time since July 6.
The broader Topix rose 0.9% to 2,272.91. Overnight, the Dow rallied more than 1%, marking its seventh straight winning session, amid solid bank earnings and optimism that the economy is on course for a soft landing.
Meanwhile, Bank of Japan Governor Kazuo Ueda signalled his resolve to maintain ultra-loose monetary policy for the time being by saying there was still some distance to sustainably and stably achieving the central bank’s 2% inflation target.
The BOJ will set policy on July 28, and speculation had been building in the market for a hawkish policy tweak after some strong wage data earlier this month.
“Ueda’s dovish comments reduced concern about a sharp rise in the Japanese yen, and it’s very logical for the Japanese equity market to also rebound,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui DS Asset Management.
Longer term, “fundamentals look pretty good for Japan, and we are probably entering the second round of a very strong run for Japanese equities,” he added, predicting the Nikkei could top 35,000 by year-end.
The Nikkei has been recovering over the past week after pulling back sharply from a 33-year closing high of 33,753.33 on July 3.
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It had rallied nearly 27% since mid-March to reach that point.
On Wednesday, 216 of the Nikkei’s 225 components rose, with 13 declining and one flat.
Every one of the Tokyo Stock Exchange’s 33 industry groups advanced, led by a 2.6% rally for shippers.
Kawasaki Kisen was the Nikkei’s top performing stock, soaring more than 6%.
Nissan Motor was another standout winner, jumping 5.9% after the Nikkei newspaper reported the automaker’s CFO as saying he would like to return the dividend payout ratio to 30%.
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