Japan’s Nikkei hits record high as tech stocks track Wall Street gains

TOKYO: Japan’s Nikkei share average touched a record high on Tuesday, as technology stocks tracked Wall Street’s strong overnight finish ahead of the US Federal Reserve’s crucial policy meeting later this week.

The Nikkei rose to as high as 45,055.38, crossing the key 45,000 level for the first time.

The index was up 0.3% at 44,904.13 by the end of the morning session.

The market was closed on Monday for a public holiday.

The broader Topix rose 0.41% to 3,173.57 on Tuesday.

The Nikkei ended 4% higher last week, closing at a record peak for a third consecutive week.

The rally was supported by a robust corporate outlook, which prompted analysts to raise target prices of some local firms, and the expectations for a new prime minister following the decision of the current premier Shigeru Ishiba to resign, said Hikaru Yasuda, chief equity strategist at SMBC Nikko Securities.

The firm outlook of the global economy, underpinned by expectations of US interest rate cuts, also underpinned the Nikkei, he said.

The Nikkei may finish the year at about the 45,000 level, but the index could briefly retreat if expectations for the US rate cuts recede and Treasury yields rise, said Yasuda.

“The market expectations for the US rate cuts are fairly strong,” he said. Shares of chipmaking equipment giant Tokyo Electron rose 2.17%, providing the biggest boost to the Nikkei.

Chip-testing equipment maker Advantest recovered from early losses to edge 0.04% higher. Wafer maker Sumco surged 9.8% to be the biggest percentage gainer in the Nikkei.

Chip-related Disco and Resonac Holdings jumped 6.9% and 5.4%, respectively.

Uniqlo-brand owner Fast Retailing fell 1.26% to weigh on the Nikkei the most.

Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 68% stocks advanced, 27% fell, and 3% traded flat.