Stocks gained further ground Thursday on the back of Wall Street’s sharp rise overnight and brisk showings by other Asian stocks, with the benchmark Nikkei average rewriting its highest close in some three months.
The 225-issue Nikkei average advanced 210.63 points, or 1.07 percent, to close at 19,859.81 on the Tokyo Stock Exchange, its highest since Aug. 20. On Wednesday, the key market gauge rose 18.55 points.
The Topix index of all first-section issues climbed 13.85 points, or 0.87 percent, to 1,600.38, after rising 0.42 point the previous day.
In midmorning trading, the Nikkei rose as high as 19,959 on buys prompted by gains in New York equities and the yen’s weakness against the dollar.
Investors were reassured by prospects for a U.S. economic recovery as minutes of the U.S. Federal Reserve’s Federal Open Market Committee meeting in October, released Wednesday, revealed most participants at the policy-setting meeting expected the country’s economic conditions will be ready for an interest rate hike in December, brokers said.
Stock prices cut gains in the early afternoon due to disappointment over the Bank of Japan’s decision to keep monetary policy unchanged at its two-day Policy Board meeting ended Thursday, brokers said.
The key indexes rebounded again in midafternoon trading thanks to buybacks by hedge funds and purchases backed by solid performances of other Asian stock markets.
The BOJ decision against additional easing was widely expected, but the market was vulnerable to selling aimed at cashing in gains and selling on a rally, with the Nikkei average having risen to levels slightly below the key chart line of 20,000, brokers said.
Still, “high expectations for government economic stimulus measures, including a supplementary budget, underpinned the market,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Hopes for further stock rises are growing amid a receding of the wariness over geopolitical risks that stemmed from Friday’s deadly terrorist attacks in Paris, brokers said.
It is only a matter of time before the Nikkei retakes 20,000, an official at a major securities firm said. After recovering the key threshold, however, profit-taking is likely to weigh down the upside of the index due to a sense of achievement, the official said.
Winners outpaced losers 1,411 to 373 in the TSE’s first section, while 130 issues were unchanged.
Volume increased slightly to 2.08 billion shares from Wednesday’s 1.94 billion shares.
Cosmetics maker Shiseido and department store Matsuya jumped 3.89 percent and 4.15 percent, respectively, following Wednesday’s news that Chinese visitors to Japan doubled from a year before to 445,600 in October.
Warehouse operators Mitsubishi Logistics and Sumitomo Warehouse rose sharply.
Mega-bank groups Mitsubishi UFJ, Mizuho and Sumitomo Mitsui were also upbeat.
On the other hand, realtors were met with profit-taking after their recent surge. Among them were Sumitomo Realty, Mitsui Fudosan and Nomura Real Estate Holdings.
Other major losers include mobile carrier SoftBank Group, Japan Post Holdings and JAL.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average climbed 190 points to end at 19,880.