The Nikkei 225 average rose Thursday for the fifth straight session and ended at a two-month high thanks to comforting congressional testimony by U.S. Federal Reserve Chairman Ben Bernanke and a weaker yen.
The Nikkei closed up 193.46 points, or 1.32 percent, at 14,808.50, the highest finish since May 22 and its longest winning streak since it advanced eight sessions in a row from Feb. 28 to March 11. The Topix rose 8.77 points to end at 1,222.01, extending its streak to four.
The Nikkei opened modestly higher on the back of small gains in U.S. equities overnight but moved in a narrow range through the morning. The average extended its gains and briefly rose more than 200 points in the afternoon as the yen weakened past 100 to the dollar.
During Wednesday’s testimony at the House Financial Services Committee, Bernanke noted that the Fed intends to adjust the timing of when it will start tapering its asset buying program depending on economic indicators.
“Because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” he said. U.S. stock prices and key U.S. long-term rates were relatively stable after his remarks.
Kenichi Hirano, adviser and market analyst at Tachibana Securities Co., noted that financial markets had moved wildly with players “pouncing on a slip of the tongue” of Bernanke’s.
“Although Bernanke’s remarks Wednesday were largely similar to his previous ones, the calm moves of financial markets provided investors a sense of safety,” Hirano said.
After the Nikkei topped 14,750, buying related to arbitrage transactions from investors who had sold call options may have helped push up the index further, brokers said.
Noting that the Nikkei rose substantially amid a dearth of selling factors despite several technical signs of the market’s overheating, Hirano said, “Adjusting the speed is necessary.”
Winners topped losers 1,054 to 564 on the first section, while 134 issues were unchanged. Volume was down at 2.676 billion shares.
JGBs follow T-bills higher
Japanese government bonds advanced further Thursday, tracking a rise in U.S. Treasury securities overnight.
The lead September futures contract on 10-year JGBs closed up 0.16 point from Wednesday at 143.38.
Turnover grew to 20,687 contracts from 17,107.