The Nikkei 225 average rose sharply Wednesday and ended above 15,000 for the first time in more than 64 months, thanks mainly to the weaker yen.
The Nikkei closed 337.61 points, or 2.29 percent, higher at 15,096.03, its best closing level since Dec. 28, 2007. On Tuesday, the key market gauge dropped 23.79 points.
The Topix rose 22.05 points, or 1.79 percent, to end at 1,252.85, the highest finish since Aug. 29, 2008. It declined 1.40 points Tuesday.
The TSE got off to a strong start, led by mainstay export-oriented issues, after the U.S. Dow Jones industrial average rewrote its all-time closing high Tuesday and the yen fell past 102 to the dollar again.
The Nikkei rose more than 350 at one point before easing somewhat on profit-taking.
But buying concentrated mainly on some mainstay shares, including high-performing exporters, while small capital stocks and companies whose earnings fell short of market expectations met with selling, brokers said.
In addition, “a surge in Japanese long-term interest rates prompted selling of real estate shares, which had led the market’s rally earlier,” said Kenichi Hirano, adviser and market analyst at Tachibana Securities Co.
The Nikkei has gained more than 70 percent since mid-November, when Yoshihiko Noda dissolved the Lower House for a snap election.
The rally has accelerated recently amid growing expectations of an improvement in corporate earnings after the yen’s fall past 100 to the dollar.
“As the yen’s recent drop was due to expectations of a U.S. economic recovery, whether the Nikkei average will rise further depends on U.S. business sentiment, said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co.
Despite the indexes’ gains, losers far outnumbered winners 1,011 to 635 in the first section, while 65 issues were unchanged.
Yield hits 13-month high
Japanese government bonds fell Wednesday on the back of the stock market rally, with the key 10-year yield rising to a 13-month high.
In interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon soared to 0.920 percent, the highest level since April 26 last year, before coming down to 0.855 percent in late trading, still up from 0.845 percent late Tuesday.