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Nikkei closes at one-month high after Wall Street sets record

JIJI

Stocks extended their winning streak to a third session on the Tokyo Stock Exchange Wednesday, backed by Wall Street’s record-breaking advance overnight, lifting the Nikkei share average to a fresh one-month closing high.

The Nikkei rose 89.20 points, or 0.45 percent, to 19,865.82, its highest finish since Aug. 8. On Tuesday, the key market gauge surged 230.85 points.

The Topix index ended up 9.88 points, or 0.61 percent, at 1,637.33, after gaining 15.19 points the previous day.

Sentiment improved after all three major U.S. stock indexes — the Dow Jones industrial average, the S&P 500 index and the tech-heavy Nasdaq composite index — hit new closing highs on Tuesday.

The advance on Wall Street reflected receding geopolitical risks linked to North Korea and easing concerns over the impact of Hurricane Irma on the United States, brokers said.

“A risk-on mood began to spread in the (Tokyo) market, which was supported mainly by short covering on Monday and Tuesday,” an official at a bank-linked securities firm said.

The situation surrounding North Korea, which conducted its sixth and most powerful nuclear test on Sept. 3, “will be in a lull for the time being,” the official said.

The official noted that North Korea is unlikely to carry out provocative acts soon after the U.N. Security Council unanimously adopted a new sanctions resolution against the country on Monday with the backing of China and Russia, both close allies of Pyongyang.

Investors “were relieved to see no (major) provocations by North Korea following the adoption of the resolution,” said Yoshihiko Tabei, chief analyst at Naito Securities Co.

“The Nikkei will retake 20,000 if the dollar rises above ¥111” with fears over North Korea fading further, Tabei said.

Rising issues far outnumbered falling ones 1,314 to 594 in the TSE’s first section, while 118 issues were unchanged.

Volume edged down to 1.605 billion shares from Tuesday’s 1.654 billion shares.

Nisshinbo Holdings posted a maximum-allowable single-day gain, supported by news reports that the textile maker has succeed in putting platinum-free catalysts for fuel cells to practical use.

Megabank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, brokerage firm Nomura and insurers Dai-ichi Life and Tokio Marine attracted purchases after their U.S. peers fared well in New York trading on Tuesday.

A slide in the yen buoyed exporters including automakers Toyota, Nissan, Honda and Subaru as well as electronics maker Panasonic and camera maker Canon.

By contrast, auto parts maker Yasunaga was hit by profit-taking after its recent surge.

Other major losers included Kyushu Electric Power and electronic parts supplier Murata Manufacturing.