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Japan’s Nikkei rises to match longest streak as foreign investors continue buying momentum

Kyodo

Japan’s benchmark Nikkei stock average rose for the 14th straight day Friday, matching its longest-ever winning streak last seen in the early 1960s as a weak yen added to expectations for solid first-half earnings among listed Japanese companies.

The Nikkei 225 average ended up 9.12 points, or 0.04 percent, from Thursday at 21,457.64, its highest close since October 1996. The broader Topix, including all first-section issues on the Tokyo Stock Exchange, finished 0.60 point, or 0.03 percent, higher at 1,730.64.

The Nikkei last scored a 14-straight-day gain in a period between December 1960 and January 1961, when Japan’s economy was expanding rapidly in the run-up to the 1964 Tokyo Olympics.

The day’s gains were only modest. Buying from investors favored the yen’s fall with some factoring in the victory for the ruling coalition in Sunday’s general election. However, purchases exceeded selling by those fearing the market might be overheating.

The Nikkei’s extended rally, which added more than 5 percent in 14 days, has been supported by expectations for economic recovery at home and abroad, brokers said.

Overseas investors started to accelerate their buying of Japanese shares from late September as concerns over political stability in Japan were eased with polls suggesting a win for Prime Minister Shinzo Abe’s Liberal Democratic Party and its junior coalition partner the Komeito party in the general election.

Investors favor the market-friendly policies adopted by the current administration and the likelihood it will continue triggered buying, brokers said.

On Friday, sentiment was lifted as the U.S. dollar climbed to the ¥113 range after the U.S. Senate passed a draft budget, which is critical to tax reform plans pushed by President Donald Trump.

“The news triggered hopes that debate on (U.S.) tax reform will go smoothly and investors were relieved after seeing the yen weakened,” said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co.

Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., noted that the yen’s weak tone has boosted optimism from major Japanese companies, which are expected to release earnings reports starting from next week.

“Some investors who opt to hold (Tokyo) shares for a short term may sell them following the election, but given the yen’s weakness, those investors might hold the stocks longer when they see positive earnings results,” Ichikawa said.

On the first section, declining issues outnumbered advancers 1,048 to 890 with 93 ending the day unchanged.

Some export-led issues gained on the weaker yen, with Isuzu Motors rising ¥12.50, or 0.8 percent, to ¥1,580.50, and Hino Motors climbing ¥6, or 0.4 percent, to ¥1,428. Apple Inc. suppliers were weak tracking their U.S. counterparts, after reports that orders for them have been cut.

Alps Electric shed ¥70, or 2.2 percent, to ¥3,120, while electric component maker TDK lost ¥20, or 0.3 percent, to ¥7,840.

Trading volume on the main section totaled 1.522 billion shares, up slightly from Thursday’s 1.520 billion shares.