Stocks rose further Monday, boosted by hopes for bolder monetary easing by the Bank of Japan to get the country out of deflation, but the benchmark Nikkei average pared gains after system problems with derivatives trading.
The 225-issue Nikkei average closed up 45.91 points, or 0.40 percent, at 11,652.29, after briefly topping 11,700 for the first time in more than 53 months. On Friday, the key market gauge gained 47.02 points.
The Topix index of all first-section issues ended 7.92 points, or 0.80 percent, higher at 992.25, after briefly rising above the 1,000 threshold for the first time since April 15, 2010, on an intraday basis. The index advanced 8.67 points the previous trading day.
Both indexes extended their winning streak to a third session.
A wide range of stocks drew buying from the outset of Monday’s trading following Wall Street’s gain late last week.
At one point in the morning, the Nikkei average climbed some 160 points to 11,767, the highest intraday level since Sept. 29, 2008, just after Haruhiko Kuroda, the government’s nominee for BOJ chief, expressed his determination to overcome deflation.
But the market soon lost steam mainly due to a suspension of index futures and options trading on the Osaka Securities Exchange caused by a system glitch.
The Nikkei average shed most of its earlier gains in the afternoon, weighed down also by a tumble in Chinese stocks, before recovering somewhat late in the session.
Kuroda told a hearing at the House of Representatives Committee on Rules and Administration that if appointed as BOJ chief, he will do anything he can to pull Japan out of deflation.
“His remarks helped weaken the yen and boost the stocks of companies with large asset holdings, such as warehouse operators and real estate developers,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
But the system glitch, which halted the OSE’s index futures and options trading for up to about four hours, “poured cold water on the market,” Nishi said.
China-related stocks met with selling as the Chinese market tumbled after the country’s government announced additional measures to curb home price rises last week, brokers said.
Winners far outnumbered losers 1,083 to 497 in the TSE’s first section, while 119 issues were unchanged. Volume rose to 3.118 billion shares from Friday’s 2.912 billion.
Real estate developers Mitsui Fudosan, Mitsubishi Estate and Sumitomo Realty had hefty gains, along with Mitsubishi Logistics and railways JR East and Tokyu.
By contrast, China-related stocks, including industrial robot maker Fanuc and construction machinery makers Hitachi Construction and Komatsu, eased.
JGBs at new low
The key 10-year Japanese government bond yield fell to hit a new low in nearly 10 years Monday as remarks by Haruhiko Kuroda, the government’s nominee for the Bank of Japan’s next chief, helped further boost expectations for the BOJ’s bold monetary easing.
In late interdealer trading in cash JGBs, the yield on the latest 327th 10-year JGB issue with a 0.8 percent coupon stood at 0.605 percent, down from 0.645 percent late Friday, after falling to as low as 0.600 percent, the lowest level for a key 10-year issue since June 24, 2003.