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Nikkei closes above 24,000 for first time in over 26 years

JIJI

Stocks surged Tuesday in the wake of a rise on Wall Street overnight, pushing up Nikkei 225 average to its first close above 24,000 in more than 26 years.

The Nikkei ended 307.82 points, or 1.29 percent, higher at 24,124.15, the best finish since Nov. 14, 1991. On Monday, the key market gauge climbed 8.27 points.

The Topix, which covers all issues on the Tokyo Stock Exchange’s first section, rose 19.15 points, or 1.01 percent, to close at 1,911.07, a level unseen since June 17, 1991, after climbing 2.18 points Monday.

Stocks were firmer from the outset as exporters attracted purchases, backed by record-breaking performances of key U.S. stock indexes Monday, brokers said.

Key indicators rose further after the Bank of Japan decided at a two-day monetary policy meeting that ended Tuesday to keep its current massive monetary easing policy unchanged.

Futures-led buying was the main driver of Tokyo stocks, market sources said.

The TSE gathered steam on “expectations for Japanese and U.S. companies to post brisk earnings” amid the recovery of the global economy, said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.

In addition, investors believe that U.S. fiscal reform plans, including a corporate tax reduction, will further push up the Japanese and U.S. markets, Fujii indicated.

Tuesday’s market was likely led by speculative players who were “forced to buy back futures” after it turned out that their forecast of a sluggish market did not come true, Fujii said.

The Nikkei may stay above 24,000 only temporarily, as the recent market condition is “not so good,” an official of a bank-affiliated securities firm said, noting that the advance-decline ratio has been sluggish recently.

On Tuesday, rising issues far outnumbered falling ones 1,649 to 346 in the first section, while 68 issues were unchanged.

Volume rose to 1.415 billion shares from 1.342 billion Monday.

Realtors, including Mitsui Fudosan, Sumitomo Realty and Mitsubishi Estate, were buoyant after a private research institute said Monday that the average unit price of new condominiums put up for sale in the greater Tokyo area in 2017 hit a 27-year high.

Sony attracted purchases thanks to a huge box-office success of the remake of its film “Jumanji.”

Electronics retailer Yamada Denki was downbeat after a media report Tuesday that it will post disappointing earnings for April-December last year.

Other major losers included oil firms Cosmo Energy and Idemitsu, airline ANA and Nippon Paint.