The Nikkei 225 stock index briefly rose more than 3 percent Monday and closed above the 20,000 line as investors’ risk appetite grew on firm U.S. jobs data and a sharp rebound on Wall Street late last week.
The Nikkei ended 477.01 points, or 2.44 percent, higher from Friday at 20,038.97. The broader Topix, which covers all first-section issues on the Tokyo Stock Exchange, finished 41.37 points, or 2.81 percent, higher at 1,512.53.
Every industry category gained ground, led by electric appliance, real estate and miscellaneous product issues.
The Nikkei ended above 20,000 for the first time since Dec. 28, the last trading day of 2018, after U.S. shares on Friday surged on December nonfarm payrolls data that were stronger than expected.
Market sentiment also improved on U.S. Federal Reserve Chairman Jerome Powell’s remarks Friday in which he said the central bank was “prepared to adjust policy quickly and flexibly,” indicating it could pause interest rate hikes if necessary.
“The market immediately welcomed Powell’s remarks that hinted at a possible halt in rate hikes, while strong U.S. jobs data in December rekindled investors’ risk appetite,” said Makoto Sengoku, market analyst at the Tokai Tokyo Research Institute.
However, the dollar’s retreat against the yen during Tokyo trading hours somewhat limited gains among export-related issues, as a stronger yen reduces exporters’ overseas profits when repatriated.
Sengoku added that investors will also be keeping close tabs on the outcome of the U.S.-China trade talks ending Tuesday. “Market sentiment would deteriorate if the two countries fail to strike any deal,” he said.
On the first section, advancing issues outnumbered decliners 1,964 to 142, while 23 ended the day unchanged.
Companies with relatively high exposure to the Chinese market jumped after the People’s Bank of China announced additional monetary stimulus on Friday to support the world’s second-largest economy. The Chinese central bank said it will cut the amount of cash that large banks must hold as reserves by 1.0 percentage point.
Hitachi Construction Machinery rose ¥126, or 5.2 percent, to ¥2,545, while Komatsu climbed ¥157.50, or 6.9 percent, to ¥2,445.50.
Technology issues drew buying following a firm rebound of U.S. counterparts in New York on Friday. Screen Holdings gained ¥275, or 6.3 percent, to ¥4,620, while Tokyo Electron advanced ¥755, or 6.4 percent, to ¥12,640.
Trading volume on the main section fell to 1.424 billion shares from Friday’s 1.551 billion.