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Nikkei regains 14,000 on strong U.S. indicator

JIJI

Stocks surged Tuesday, aided by buying on the back of a robust U.S. economic indicator, with the Nikkei 225 average closing above 14,000 for the first time in about a month.

The Nikkei closed up 246.24 points, or 1.78 percent, to close at the day’s high of 14,098.74, finishing above 14,000 for the first time since May 29. On Monday, the key market gauge climbed 175.18 points.

The Topix rose 21.14 points, or 1.84 percent, to end at 1,171.84, also the day’s high, after rising 16.86 points the previous day.

Both indexes extended their winning streak to a fourth session.

Stocks attracted purchases from the outset of trading on the heels of an overnight rise in New York equities thanks to a better than expected outcome of the U.S. Institute for Supply Management’s manufacturing index for June, released Monday.

The Nikkei retook the 14,000 line in the morning session, supported by brisk purchases of export-oriented issues such as automakers and electronics makers.

However, the TSE’s upside was pressured by profit-taking after the key stock price gauge jumped more than 1,000 points from Thursday through Monday.

“Expectations grew for economic recovery in Japan and the United States” after the Bank of Japan’s “tankan” quarterly business sentiment survey, released Monday, showed a positive headline index for the first time in seven quarters and the June ISM topped the boom-or-bust dividing line of 50, said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.

Rising issues far outnumbered falling ones 1,410 to 233 in the first section, while 70 issues were unchanged. Volume ballooned to 3.020 billion shares from Monday’s 2.477 billion.

Tokyo Electric rocketed 19.12 percent to score a daily limit gain on media reports that the utility aims to apply for the restart of two reactors at the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture, brokers said.

Sale good but JGBs slip

Japanese government bonds eased Tuesday despite the day’s solid auction of a new 10-year JGB issue.

In late interdealer trading in cash JGBs, the yield on the benchmark 329th 10-year issue with a 0.8 percent coupon stood at 0.890 percent, up from 0.885 percent late Monday.