Stocks scored robust gains Monday, inspired by a reported government selection of the Bank of Japan’s new chief and expectations of the country’s entry into Trans-Pacific Partnership free-trade negotiations.
The Nikkei 225 average improved by 276.58 points, or 2.43 percent, to finish at the day’s high of 11,662.52, its best finish since Sept. 29, 2008.
The Topix shot up 17.22 points, or 1.79 percent, to end at 980.70, the highest closing level since April 30, 2010.
The Nikkei opened with a surge after media reports that the administration plans to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as BOJ governor.
Investors also took heart from Prime Minister Shinzo Abe’s effective declaration of his intention to take Japan into the TPP talks after his summit with U.S. President Barack Obama late last week, brokers said.
“Expectations for ‘Abenomics’ grew after a series of major events ended,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc., referring to Abe’s economic policy measures aimed at beating deflation, including bond monetary easing.
The TSE was also boosted by brisk performances of New York and European equities Friday and the fourth straight month of rise in Germany’s Ifo business climate index in February, among other positive incentives.
“There are no big concerns in Japan and abroad. I believe stocks prices will stay on a solid note and the Nikkei will aim for 12,000 in March after experiencing selling on a rally,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Still, investors are keeping a wary eye on the course of Italy’s parliamentary election Sunday and Monday, brokers said.
“Optimism over the European debt problems may recede depending on the election results,” Nikko’s Nishi said.
Winners far exceeded losers 1,368 to 252 in the first section, while 80 issues were unchanged. Volume rose to 3.365 billion shares from Friday’s 3.304 billion.
Hopes for more powerful monetary easing under the new BOJ leadership shored up financial issues and realtors.
They included banking groups Mizuho, Mitsubishi UFJ and Sumitomo Mitsui, brokerage Nomura and insurer Dai-ichi Life. Among realtors, Mitsui Fudosan and Sumitomo Realty surged.
Automakers Toyota and Honda were buoyant on the weaker yen, along with electronics maker Sony and camera manufacturer Canon.
By contrast, Sharp plummeted 5.16 percent following a media report that the electronics giant is considering a capital increase through a public share offering, brokers said.
Also on the minus side were construction machinery maker Komatsu, mobile game site operator DeNA and JAL.
JGBs score solid gains
Japanese government bonds gained further ground Monday after media reports on the government’s planned nominee for the next Bank of Japan governor, with a key 10-year JGB yield falling to a two-month low.
The yield on the latest 327th 10-year JGB issue with a 0.8 percent coupon briefly dropped to 0.700 percent in interdealer trading, the lowest level for a key long-term JGB yield since Dec. 12.