Business / Financial Markets | TSE DATA & REPORT

Tokyo stocks continue ascent in wake of Wall Street surge

JIJI

Stocks continued to rise on the Tokyo Stock Exchange on Monday, helped by Wall Street’s sharp advance on Friday.

The 225-issue Nikkei average rose 354.83 points, or 1.65 percent, to end at 21,824.03, after gaining 101.13 points on Friday.

The Topix index of all first-section issues closed up 25.82 points, or 1.51 percent, at 1,741.30. It rose 5.53 points the previous trading day.

The Nikkei average briefly gained over 500 points in the morning after U.S. equities surged as slower-than-expected wage increases in Friday’s U.S. jobs data brushed off inflation concerns. The Nikkei was also helped by the yen’s weakening against the dollar.

But a growing number of investors later became inactive as they observed developments in a scandal over a controversial sale of state land to private school operator Moritomo Gakuen, brokers said.

The government acknowledged Monday that documents related to the land deal had been rewritten after the scandal came to light in late February last year.

The scandal has “dampened the sentiment of investors, especially nonresidents,” an official at a bank-linked securities firm said.

But stocks attracted buybacks in the afternoon as Finance Minister Taro Aso indicated his intention not to resign over the case, Yutaka Miura, senior technical analyst at Mizuho Securities Co., pointed out.

Opposition parties are likely to grill Prime Minister Shinzo Abe and Aso over the matter, Miura indicated, suggesting that the cronyism allegations are seen to have lingering adverse effects on the market.

The bank-linked securities firm official said that the U.S. jobs data “was favorable” to both U.S. and Japanese shares, adding that the Tokyo market has “entered a phase of consolidating its downside for a further rise.”

Winners overwhelmed losers 1,712 to 309 on the TSE’s first section, while 48 issues were unchanged.

Volume fell to 1.25 billion shares from Friday’s 1.75 billion.

Financial issues — such as megabank groups Mitsubishi UFJ, Sumitomo Mitsui and Mizuho and insurers Dai-ichi Life and Sompo Holdings — were upbeat after their U.S. peers fared well in New York trading on Friday.

Other major winners included semiconductor-related Tokyo Electron and industrial robot maker Fanuc.

By contrast, home builder Sekisui House was hit by profit-taking after its surge Friday, brokers said.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average rose 370 points to 21,720.