Tokyo stocks advanced Tuesday on growing optimism over the economy, pushing the key Nikkei index above the 12,000 line for the first time in 32 months.
The 225-issue Nikkei average jumped 121.38 points, or 1.02 percent, to close at 12,079.70, its highest finish since the 12,163.67 marked Aug. 8, 2001.
The broader Topix index of all first section issues on the Tokyo Stock Exchange gained 10.20 points, or 0.85 percent, to 1,209.44, its highest finish since 1,217.92 on Aug. 8, 2001.
Tokyo stocks found upward momentum on buying of exporters on a weaker yen in the early afternoon after ending the morning a touch lower on profit-taking that focused on domestic demand-related issues, brokers said.
The dollar’s brief rise into the lower-107 yen level in the afternoon sparked a bout of buying of export-oriented technology and auto issues, pushing up the market overall, they said.
“The dollar’s rise against the yen sparked buying of exporters, as investors had been waiting for an incentive to buy shares,” said Kenichi Azuma, equity strategist at Cosmo Securities Co.
An overnight gain on Wall Street also warmed investor sentiment, brokers said.
U.S. stocks rose Monday on hopes for a solid first-quarter earnings season to begin Tuesday, pushing key stock indexes to one-month closing highs.
The 30-issue Dow Jones Industrial Average rose 87.78 points, or 0.84 percent, to 10,558.37. The Nasdaq Composite Index advanced 21.95 points, or 1.07 percent, to 2,079.12.
Amid upbeat prospects for both the Japanese and U.S. economies, Nagayuki Yamagishi, senior strategist at UFJ Tsubasa Securities Co., said,
“The Nikkei is expected to move as high as 12,500 by the end of the month.”
The day’s volume leader was Resona Holdings, which rose 16 yen to 190 yen.
All four of Japan’s mega banks gained ground and helped push Tokyo stocks up overall, brokers said.
Above bust line
The government said Tuesday its key gauge of the state of the economy stayed above the boom-or-bust line of 50 percent in February for the 10th consecutive month, a sign of continued improvement.
The index of coincident economic indicators came to 88.9 percent, up from a revised 80 percent in January, the Cabinet Office’s Economic and Social Research Institute said in a preliminary report.
The 10 months that the index has stayed above 50 percent is the longest period since the index was positive for 14 straight months between July 1999 and August 2000, a Cabinet Office official said.
A reading above 50 percent is considered a sign of economic expansion, while a figure below that line is seen as a sign of contraction.
Of the 11 indicators used to calculate the coincident index, nine available indicators, including those on commercial sales and sales of small and midsize companies, showed growth compared with the previous month.
Of the nine, three indicators — power consumption by large-lot users, overtime work in the manufacturing sector and department store sales — rose to their highest levels since February 2002.