Tokyo stocks ended higher in volatile trading Tuesday as a potential coronavirus vaccine breakthrough fueled hopes of a global economic recovery, although the benchmark Nikkei briefly turned negative with investors locking in gains.
The 225-issue Nikkei average ended up 65.75 points, or 0.26%, from Monday at 24,905.59, its highest close since Nov. 5, 1991. The broader Topix index of all first section issues on the Tokyo Stock Exchange finished 18.90 points, or 1.12%, higher at 1,700.80.
The Nikkei rose above the 25,000 mark to hit a fresh 29-year high in the morning trade, tracking rallies on global markets after news that a coronavirus vaccine had shown 90% effectiveness.
“The vaccine development lifted hopes that economic activities will become more active and restrictions on the movement of people will end, boosting sectors battered by the pandemic such as tourism and airlines,” said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co.
The market was also supported after Prime Minister Yoshihide Suga instructed his ministers to compile a third extra budget for fiscal 2020, which will end in March, to finance a fresh stimulus package to fight the economic impact of the pandemic, Sawada said.
“Japanese stocks are seen rallying for the sixth straight session, after the U.S. market rocketed on news that a vaccine Pfizer and BioNTech are developing was 90% effective in protecting against COVID-19 infections,” Okasan Online Securities said in a commentary.
“It’s big news amid worries about the virus infection spreading in Europe and in the U.S.,” it said.
A cheaper yen was also supporting Japanese shares, analysts said.
The dollar fetched ¥105.10 in early Asian trade, against ¥105.31 in New York, but well up from ¥103.52 in Tokyo late Monday.
In New York, the bellwether Dow Jones Industrial Average jumped more than 830 points or 2.95% to finish the day at 29,157.97.
With spiking coronavirus cases forcing millions of people worldwide to face new restrictions, news that a vaccine might be coming soon offered hope the economy could begin to return to normal in coming months.
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