Tokyo’s broad Topix stock index ended at a 30-year high and the Nikkei surged over 2% Friday after Prime Minister Yoshihide Suga expressed his intention to resign, stirring hopes for a new government to cope with the COVID-19 pandemic.
The 225-issue Nikkei stock average ended up 584.60 points, or 2.05%, from Thursday at 29,128.11, ending at its highest level since June 16. The Topix index of all first section issues on the Tokyo Stock Exchange finished 31.88 points, or 1.61%, higher at 2,015.45, ending at its highest level since April 18, 1991.
Every industry category gained ground, led by iron and steel, electric appliance and machinery issues.
The U.S$. was steady around the ¥110 line, ahead of the release of U.S. nonfarm payrolls data for August later in the day, dealers said.
At 5 p.m., the dollar fetched ¥110.03-04 compared with ¥109.88-98 in New York and ¥110.00-02 in Tokyo at 5 p.m. Thursday.
The euro was quoted at $1.1874-1875 and ¥130.65-69 against $1.1871-1881 and ¥130.49-59 in New York and $1.1846-1848 and ¥130.31-35 in Tokyo late Thursday afternoon.
The yield on the benchmark 10-year Japanese government bond edged up 0.005 percentage point from Thursday’s close to 0.035% as investors sold the safe-haven debt as surging stocks helped whet their risk appetite.
Stocks rose for the fifth day, with both indexes advancing sharply after Suga said that he will not run in the ruling Liberal Democratic Party’s leadership race on Sept. 29, effectively announcing his resignation amid mounting criticism over his response to the COVID-19 pandemic.
“The market reacted positively for the time being amid high expectations for new COVID-19 countermeasures and economic policies under a different government, although the next LDP leader has yet to be determined,” said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
The news raised hopes for new policies to fight the crisis as the current measures under the Suga government appear to face a deadlock, Yamaguchi said.
Maki Sawada, a strategist in Nomura Securities Co.’s investment content department, said high expectations for fresh economic measures against the coronavirus fallout boosted shares sensitive to domestic demand.
Steelmakers were among such shares, with Nippon Steel surging ¥108, or 5%, to ¥2,267.5, while Kobe Steel jumped ¥31, or 4.5%, to ¥719.
Some food-related issues were higher after reports that the government is considering allowing restaurants that have implemented anti-coronavirus measures to sell alcohol from October or November, regardless of whether they are under a COVID-19 state of emergency.
Kushikatsu Tanaka Holdings climbed ¥137, or 7%, to ¥2,085, and Torikizoku Holdings advanced ¥71, or 3.9%, to ¥1,885.
Energy-related shares were lifted after crude oil futures in New York rose to their highest level in nearly a month. Refiner Eneos Holdings rose ¥6.7, or 1.6%, to ¥436.6, and oil explorer Inpex gained ¥9, or 1.2%, to ¥772.
On the first section, advancing issues outnumbered decliners 1,768 to 343, while 77 ended unchanged.
Trading volume on the main section rose to 1.243.10 billion shares from Thursday’s 1.058.06 billion shares.
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