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Nikkei rises further to close at fresh 17-month high

JIJI

The benchmark Nikkei average advanced further to close at a fresh 17-month high on the Tokyo Stock Exchange on Thursday, backed by the yen’s continued weakening against the dollar.

The 225-issue Nikkei finished up 61.46 points, or 0.31 percent, at 19,961.55, marking its highest finish since 20,012.40 on Dec. 1, 2015. On Wednesday, the key market gauge went up 57.09 points.

The Topix index of all first-section issues gained 1.67 points, or 0.11 percent, to end at 1,586.86, after rising 3.42 points the previous day.

Stocks opened slightly firmer on the back of the dollar’s rise above ¥114, but lost some of their momentum later in the morning due partly to profit-taking.

The market regained steam in midafternoon trading as companies that announced brisk earnings attracted purchases, with the Nikkei average briefly climbing to as high as 19,989.94.

Still, its topside was capped for the rest of the day, reflecting investor concerns over high prices, brokers said.

On the Nikkei average’s failure to retake 20,000, Kenichi Hirano, market analyst at K Asset Co., said, “Investors found it difficult to step up purchases because they are unsure whether the index will continue to advance steadily after its possible rise above the threshold.”

The 20,000 line is “close, but distant,” he said.

Although the dollar strengthened against the yen, investors are skeptical about an acceleration in its upswing as the U.S. Federal Reserve’s additional interest rate hike in June has already been priced in, brokers said.

But a bank-affiliated securities company official said, “Investor appetite is still strong,” citing relatively high levels of trading volume and value.

While noting that the Nikkei is expected to continue testing its upside toward 20,000, an official at a major brokerage house said that fresh incentives, such as the U.S. Dow Jones industrial average’s record-breaking advance, are necessary for helping boost the key Japanese stock index.

Rising issues outnumbered falling ones 979 to 877 on the TSE’s first section, while 159 issues were unchanged.

Volume grew to 2.292 billion shares from Wednesday’s 2.169 billion shares.

SoftBank Group rose sharply after the mobile phone carrier said Wednesday that its consolidated net profit topped ¥1 trillion for the first time ever in fiscal 2016, which ended in March.

General contractor Obayashi jumped 4.09 percent, with investors heartened by its announcement on Wednesday of a record-high operating profit estimate for fiscal 2017.

Other major winners included clothing store chain operator Fast Retailing, mega-bank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, game-maker Nintendo and Japan Tobacco.

By contrast, air conditioner maker Daikin and electronic parts producer TDK were downbeat after releasing on Wednesday weaker-than-expected operating profit estimates for the current fiscal year.

Ono Pharmaceutical also met with selling on its disappointing fiscal 2017 operating profit forecast announced on Thursday.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average climbed 60 points to 19,960.