The Nikkei average closed at the highest level in some six weeks on the Tokyo Stock Exchange Monday, helped by higher equities abroad and the yen’s fall against the dollar.
The 225-issue Nikkei average climbed 294.88 points, or 1.74 percent, to close at 17,233.75, the highest finish since Feb. 2. On Friday, the key market gauge climbed 86.52 points.
The Topix index of all first-section issues ended up 20.63 points, or 1.52 percent, at 1,379.95, after rising 7.15 points the previous trading day.
Both indexes extended their winning streak to a third session.
The Tokyo market kicked off the week with sharp gains on the back of rises in U.S. and European stocks and crude oil prices in New York late last week, as well as the dollar’s ascent against the yen, brokers said.
Investor sentiment was also brightened by far-better-than-expected Japanese machinery orders data for January, released just before the opening bell, brokers said. The Nikkei average briefly surged some 350 points in late morning trading.
However, the market’s upside was capped in the afternoon due to a halt to the yen’s easing against the dollar.
Investors also retreated to the sidelines as the Bank of Japan started a two-day policy-setting meeting through Tuesday, brokers said.
“Overall trading was thin due to the BOJ’s meeting. But buying was underpinned by some hopes for additional easing by the BOJ,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Most analysts expect that the BOJ will keep its monetary policy intact at the ongoing meeting, given that stock prices have regained composure after market turbulence in the wake of the central bank’s announcement of its decision to introduce a negative interest rate policy at the Policy Board meeting in January.
An official at a bank-affiliated brokerage firm said, however, that selling to cash-in gains is likely to hit the market if the BOJ forgoes additional easing, after the Nikkei average jumped nearly 600 points in the three sessions through Monday.
Rising issues far outnumbered falling ones 1,702 to 177 in the TSE’s first section, while 63 issues were unchanged.
Volume decreased to 2.02 billion shares from Friday’s 2.76 billion shares.
Mega-bank groups Sumitomo Mitsui, Mitsubishi UFJ and Mizuho drew buying after their U.S. and European counterparts enjoyed gains on Friday, brokers said. Other financial issues, such as insurers Dai-ichi Life and Tokio Marine and brokerage firm Nomura, were also buoyant.
Realtors ended higher on hopes for additional easing measures by the BOJ, brokers said. Among them were Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate.
On the other hand, telecommunications carriers including KDDI, NTT and NTT Docomo met with profit-taking after their recent gains, brokers said.
Also on the minus side were Kansai Electric Power, game maker Nintendo and Japan Tobacco.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average advanced 260 points to close at 17,110.