Business / Financial Markets

Nikkei tops 23,000 line for first time since late February

Jiji

Tokyo stocks soared Monday following the U.S. market’s big advance, sending the benchmark Nikkei average above 23,000 for the first time in some 3½ months.

The Nikkei average of 225 selected issues listed on the first section of the Tokyo Stock Exchange jumped 314.37 points, or 1.37 percent, to end at 23,178.10, its first finish above the psychologically important threshold since Feb. 21. On Friday, the key market gauge went up 167.99 points to extend its winning streak to a fifth market day.

The Topix index of all TSE first-section issues closed up 18.24 points, or 1.13 percent, at 1,630.72, after gaining 8.66 points the previous trading day.

The Tokyo market opened sharply higher on broad-based buying prompted by substantial rises in all major U.S. stock indexes on Friday, including the Dow Jones industrial average, which closed 3.15 percent higher.

Economic recovery prospects were fueled by the U.S. Labor Department’s announcement that, against the market consensus, nonfarm payrolls rose while the jobless rate dropped in the United States in May, brokers said.

After the initial buy orders were executed, the market saw profit-taking pressure increase amid persistent worries that the rally could be overheating. But many stocks, particularly cyclicals, stayed in the green on the back of unabated recovery expectations as well as the yen’s weakness against the dollar, they noted.

“Besides the big Wall Street leap, which has made risk appetite stronger, higher crude oil prices and U.S. long-term interest rates helped Tokyo stocks extend their gains,” said Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc.

“The jobs report suggested that the U.S economy smoothly made its first step toward recovery,” said an official at a bank-affiliated securities firm said. But the official quickly added that it is too optimistic to think that jobs will increase steadily in the United States from now on.

On the TSE’s first section, rising issues outnumbered falling ones 1,592 to 526 while 51 issues were unchanged. Volume increased to 1.703 billion shares from Friday’s 1.392 billion shares.

Automaker Toyota, technology and entertainment giant Sony and other export-oriented issues rose due to the weaker yen.

Oil stocks including JXTG and Idemistu were higher thanks to the upbeat crude oil market.

Chipmaking gear manufacturer Tokyo Electron, test device maker Advantest and other issues in the semiconductor sector capitalized on their U.S. peers’ vigorous performances.

Among other winners were clothing store chain Fast Retailing and technology investor SoftBank Group.

Meanwhile, beverage maker Ito En dived after revising down its consolidated operating profit estimate for the year that ended in April.

Also on the negative side were daily goods producer Kao and drugmaker Chugai.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average gained 320 points to end at 23,190.

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