Stocks rebounded on the Tokyo Stock Exchange on Monday, supported by Wall Street’s gain late last week, with Japan’s benchmark Nikkei average snapping its four-session losing streak.
The 225-issue Nikkei average rose 348.55 points, or 1.55 percent, to end at 22,901.77, after losing 141.23 points on Friday.
The Topix index of all first-section issues gained 24.43 points, or 1.36 percent, to 1,817.90, its highest close since Nov. 14, 1991. On Friday, the index shed 14.67 points.
Individual investors were relieved to see all major U.S. stock indicators rewrite their record highs on Friday on expectations that U.S. tax reforms will be enacted by year-end, brokers said.
Japanese stocks also benefited from purchases by foreign investors of large-cap issues, including banks, machinery and electronics, they said.
“Foreign investors seem to have built up their positions (one last time) before the Christmas holidays,” an official of a bank-affiliated securities firm said. But the official predicted that their appetite for purchase will wane toward the year-end.
“Although the Nikkei seems as if it had large gains, it can be said that it only moved in a range between the 25-day moving average and this year’s high” of 22,938.73 marked on Dec. 11, said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
By Monday, the Tokyo stock market had factored in the possible enactment of the U.S. tax reform bill, Suzuki said, and warned that the Nikkei may end up being at current levels throughout this year, lacking major trading factors.
But he also indicated the possibility of further gains, citing a market anomaly in which stock prices tend to rise in the last week of the year.
Furthermore, “there still may be remaining heat on the market” deriving from this year’s rise, Suzuki said, suggesting that investors may step up purchases of issues that have fared well this year.
Rising issues outnumbered falling ones 1,291 to 695 in the TSE’s first section, while 68 issues were unchanged.
Trading volume fell to 1.613 billion shares from Friday’s 1.844 billion shares.
Financial issues such as banks Mitsubishi UFJ, Resona and Sumitomo Mitsui Trust were upbeat after U.S. peers performed well on Friday.
Semiconductor-related Tokyo Electron, Advantest and Shin-Etsu Chemical attracted purchases, also in line with their brisk U.S. peers.
Other major winners included exporters such as Toyota, Isuzu, Suzuki, Kyocera and TDK.
By contrast, Shimizu and Kajima were downbeat after public prosecutors on Monday raided the general contractors for alleged bid-rigging involving a magnetic levitation shinkansen train project.