Tokyo stocks climbed sharply on Thursday as market players took heart in Democratic victories in the U.S. Senate runoff elections in the state of Georgia, which raised hopes for a substantial economic package in the United States.

The 225-issue Nikkei average of the Tokyo Stock Exchange rallied 434.19 points, or 1.60%, to close at 27,490.13, snapping its four-day losing streak. On Wednesday, the benchmark index lost 102.69 points.

The Topix index of all first section issues closed at 1,826.30, up 30.12 points, or 1.68%, after gaining 4.96 points the previous day.

The market got off to a strong start after it became clear overnight that Democratic candidates won both of the closely watched Georgia runoff races held Tuesday.

The victories ensured a “blue wave” of full Democratic control of the U.S. government and Congress that investors hope will lead to larger stimulus spending, brokers said.

Stocks, especially banking and insurance names, were also buoyed by a rise of the key U.S. 10-year Treasury yield above 1% for the first time since the start of the novel coronavirus crisis.

At one point in the morning, the Nikkei climbed nearly 570 points to hit the highest intraday level since August 1990.

Market players welcomed the Democratic victories as a positive market-moving factor after initially expecting at least one Republican candidate to win in the runoffs, brokers said.

“Policies under President-elect Joe Biden are expected to be confined to the middle of the road and not too progressive, as the Democrats won only by slim margins,” Kazuo Kamitani, senior associate at Nomura Securities Co.’s Investment Research & Investor Services Department, said.

“Additional stimulus spending will only be moderately large, while a major tax hike is unlikely to come soon,” Kamitani added.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said that investors were unfazed by the storming of the U.S. Capitol by supporters of President Donald Trump.

“The sense of caution has already passed, and lawmakers have returned to deliberations,” Ichikawa said, adding that the transition of power is likely to go smoothly.

In the TSE first section, advancing issues far outnumbered falling ones 1,664 to 445 while 77 issues were unchanged. Volume increased to 1.513 billion shares from Wednesday’s 1.179 billion shares.

Insurers T&D Holdings and Dai-ichi Life surged 6.72% and 7.39%, respectively, while banking group Sumitomo Mitsui Financial advanced 5.46%, reflecting the rise of U.S. long-term interest rates.

Value stocks including steelmakers JFE and Nippon Steel attracted buying, helped by the rise of their peers in the U.S. market, as investors found comfort in the Democratic victories.

Other major winners included heavy machinery-maker Hitachi Zosen, which shot up 13.68%.

On the other hand, SoftBank Group sank 1.56% on media reports that the United States is considering adding Chinese e-commerce giant Alibaba Group Holding, in which the Japanese technology investor holds a large stake, to a list of companies Americans will be banned from investing in.

Z Holdings, the parent of internet service provider Yahoo Japan, and cybermall operator Rakuten also met with selling.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 430 points to 27,440.

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