Stocks gained further ground Monday as the yen weakened on the back of improved U.S. economic data, with the benchmark Nikkei average ending at a fresh 64-month high.
The 225-issue Nikkei average closed up 222.69 points, or 1.47 percent, at 15,360.81, the highest closing level since Dec. 27, 2007. On Friday, the key market gauge gained 100.88 points.
The Topix index of all first-section issues rose 16.27 points, or 1.30 percent, to end at 1,269.51, the highest finish since Aug. 12, 2008. The index climbed 8.01 points the previous trading day.
The Tokyo market kicked off the week on a strong note as a wide range of issues, including mainstay export-oriented stocks as well as shipping and resource-related issues, drew buying after gains in major European and U.S. stock indexes on Friday and the yen’s decline, brokers said.
After falling past 103 to the dollar in overseas trading Friday, the yen rebounded sharply to around 102 in early Monday trading. But the yen moved in a 102.60-90 range after the Tokyo stock market opened.
The Nikkei average gradually extended gains and briefly rose more than 240 points in the early afternoon, led by index futures.
The Tokyo market was supported by growing hopes for an upswing of corporate earnings in the current business year thanks to the weaker yen, as well as by a firm trend in major stock markets abroad, brokers said.
The Dow Jones industrial average and the S&P 500 index, as well as Germany’s DAX index, rewrote their all-time closing highs Friday.
An upward revision to the Japanese government’s assessment on the domestic economy, released in the late morning, also helped market sentiment, brokers said.
“Higher index futures seem to have prompted arbitrage trading involving sales of index futures and purchases of cash stocks, boosting the Nikkei average further,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
The second part of Prime Minister Shinzo Abe’s economic growth strategy, announced Friday, was received positively by investors, although some related issues met with profit-taking as they had already surged prior to the announcement, Nishi said.
But Nishi noted that the latest measures “came up short as they did not include corporate tax cuts, which are seen as a key to a turnaround of the economy.”
Winners topped losers 1,106 to 524 in the TSE’s first section, while 83 issues were unchanged. Volume rose to 4.870 billion shares from 4.405 billion Friday.
Tokyo Electric rocketed 15.97 percent to score a daily limit gain, after a newspaper report that the power utility plans to apply for approval for restarting reactors 1 and 7 at its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture in July once new regulations on nuclear plants take effect in the month.
Chubu Electric rose 7.83 percent and Osaka Gas 4.15 percent after the U.S. on Friday OK’d exports of U.S.-produced natural gas, including shale gas, to Japan.
JGBs lose ground
Japanese government bonds lost ground Monday as a surge in Tokyo stocks prompted investors to sell safe-haven JGBs.
In late interdealer trading in cash JGBs, the yield on the latest 328th 10-year issue with a 0.6 percent coupon stood at 0.840 percent, up from 0.795 percent late Friday.