Stocks surged Monday in the first session of the 2019 business year, as buying grew in the wake of rises in overseas equities and strong Chinese manufacturing data.
The market also got a boost from congratulatory purchases ahead of the announcement of Japan’s next era name late in the morning.
The Nikkei 225 average shot up 303.22 points, or 1.43 percent, to end at 21,509.03. On Friday, the key market gauge advanced 172.05 points.
The Topix, which covers all first-section issues finished 24.17 points, or 1.52 percent, higher at 1,615.81 after gaining 8.79 points Friday.
The market got off to a strong start following Wall Street’s continued advance Friday on sustained hopes for progress in U.S.-China trade talks and an improvement in the purchasing managers’ index in China announced Sunday, brokers said.
Investors also stepped up buying to celebrate the new era name from the outset, brokers said. The name is “Reiwa,” to be used starting May 1 upon Crown Prince Naruhito’s accession to the throne, Chief Cabinet Secretary Yoshihide Suga announced before noon.
Stocks accelerated their upswings in the morning on purchases induced by the yen’s easing against the dollar and a jump in Shanghai stocks, allowing the Nikkei to gain over 470 points.
In the afternoon, however, the market trimmed gains due to selling on a rally, brokers said.
“In addition to the China PMI reading and the weaker yen, a rise in Nikkei futures on the Chicago Mercantile Exchange contributed to the strong opening,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
The Bank of Japan’s tankan survey for March, released just before the opening bell, showed that business conditions deteriorated in both large manufacturers and large nonmanufacturers.
But the quarterly report affected the market little, as dismal results had already been expected, brokers said
“The market will likely search for direction this week,” with attention focused on currency movements and U.S. economic data, including the Institute for Supply Management’s manufacturing index for March, due out later Monday, Otani said.
Rising issues far outnumbered falling ones 1,837 to 259 in the first section, while 43 issues were unchanged.
Volume increased to 1.419 billion shares from 1.174 billion Friday.
China-linked issues attracted purchases. Among them, industrial robot maker Yaskawa Electric went up 5.04 percent, construction machinery manufacturer Komatsu 3.07 percent and Nippon Steel 2.99 percent.
Daiichi Sankyo jumped 8.25 percent to a listing-to-date high after the drugmaker announced a business tie-up with British peer AstraZeneka over a cancer medicine.
Other major winners included technology investor SoftBank Group and automaker Toyota.
Meanwhile, Yoshinoya Holdings dropped 1.68 percent on its profit warning for the year that ended in February.
Also on the minus side were cybermall operator Rakuten and airline JAL.