The Nikkei average rose Wednesday, helped in part by overnight gains on Wall Street, and ended at its highest closing level in nearly 56 months.
The benchmark index finished 95.78 points higher at 13,288.13, the best figure since Aug. 12, 2008. The Topix rose for the sixth straight session, ending up 19.00 points at 1,121.04, the highest since Sept. 29, 2008.
The TSE opened with modest losses after the yen strengthened in early Tokyo trading.
The Nikkei, however, quickly rebounded, led by index futures, as the yen’s rise halted. Investor sentiment was also supported after the Dow Jones industrial average marked an all-time closing high Tuesday on the back of hopes for steady U.S. corporate earnings, brokers said.
The Nikkei briefly rose more than 130 points but stopped short of exceeding the previous day’s intraday high of 13,331.39 due to some technical indicators signaling market overheating and a dearth of fresh trading incentives, brokers said.
“Market players felt like locking in profits on the upside amid wariness over a possible ballistic missile launch by North Korea and as the yen is taking a breather just short of the psychologically important levels of 100 against the dollar and 130 against the euro,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
But investor eagerness to buy on dips remains intact, helping the market hold firm, he added.
Winners outnumbered losers 1,067 to 560 in the first section, while 86 issues were unchanged.
Volume rose to 5.277 billion shares, the third-largest ever, from Tuesday’s 4.700 billion.
Lagging sectors outperformed the overall market. Steelmakers Nippon Steel & Sumitomo Metal shot up 7.26 percent and Kobe Steel rose 6.78 percent, while oil distributors Showa Shell Sekiyu soared 8.39 percent and Cosmo Oil surged 11.11 percent.
Major trading houses Mitsubishi, Mitsui, Itochu and Sumitomo also posted hefty gains.
Banking groups Sumitomo Mitsui and Mitsubishi UFJ were upbeat, along with brokerage Nomura.
Rough day for JGBs
Japanese government bonds tumbled Wednesday as stocks gained ground, with the key 10-year JGB yield topping 0.6 percent.
In late interdealer trading in cash bonds, the yield on the latest 328th 10-year JGB issue with a 0.6 percent coupon stood at 0.630 percent, up from 0.530 percent late Tuesday.