Tokyo stocks ended sharply higher Tuesday as sentiment improved on overnight record highs on Wall Street, while a slight weakening of the yen against the U.S. dollar supported export-related shares.
The 225-issue Nikkei Stock Average ended up 505.60 points, or 1.77%, from Monday at 29,106.01. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 22.98 points, or 1.15%, higher at 2,018.40.
Every industry category gained ground, led by marine transportation, iron and steel, and electrical appliance issues.
The U.S. dollar edged up toward the ¥114 line, as it was bought on speculation the interest rate gap between the United States and Japan will widen as the U.S. Federal Reserve moves to normalize monetary policy, dealers said.
At 5 p.m., the dollar fetched ¥114.04-¥05 compared with ¥113.67-¥77 in New York and ¥113.63-¥65 in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.1597-$1599 and ¥132.26-¥30 against $1.1606-$1616 and ¥132.00-¥10 in New York and $1.1657-$1659 and ¥132.46-¥50 in Tokyo late Monday afternoon.
The yield on the benchmark 10-year Japanese government bond inched up 0.005 percentage points from Monday’s close to 0.100%, as investors sold the safe-haven debt, as Tokyo stocks showed sharp gains. Bond yields move inversely to prices.
Stocks gained throughout the day across a broad range of sectors following robust U.S. corporate earnings that brought Wall Street to record highs, with the market additionally supported by advances in some Asian markets. The Nikkei index rose nearly 2%, moving in a tight range after it surpassed the 29,000 mark.
“U.S. earnings triggered investors to buy cyclical shares sensitive to economic fluctuations, while a range of factors including gains in U.S. stock futures and a weaker yen pushed the market up further,” said Maki Sawada, a strategist at Nomura Securities Co.’s investment content department.
Investors are looking toward domestic corporate earnings reports to be released throughout the week, with eyes on whether results will bring the Nikkei closer to the 30,000 mark amid concerns over how profit forecasts are affected by higher crude oil and material prices, she said.
Concerns over China’s slowing economic recovery and its possible impact on the earnings outlook are also drawing investor attention amid lingering worries over the risk of default by debt-ridden property developer Evergrande Group, she added.
On the First Section, advancing issues outnumbered decliners 1,685 to 398, while 101 ended unchanged.
Among notable gainers were bridal-related issues after Princess Mako, a niece of Emperor Naruhito, married her boyfriend Kei Komuro on Tuesday. The Imperial Household Agency submitted legal paperwork to register the couple’s marriage on their behalf, four years after their relationship was made public.
IBJ, which operates marriage consultation services, rose ¥16, or 1.5%, to ¥1,114, wedding ceremony management firm Escrit jumped ¥22, or 3.9%, to ¥581, while baby goods maker Pigeon climbed ¥86, or 3.5%, to ¥2,546.
Kawasaki Kisen Kaisha advanced ¥280, or 5.4%, to ¥5,460, after a news report Tuesday that the firm’s pretax profit for the April to September period expanded around 23 times from a year earlier and exceeded market expectations.
Other marine transportation issues were pulled up by the report, with Mitsui O.S.K. Lines gaining ¥150, or 2.2%, to ¥6,870 and Nippon Yusen rising ¥230, or 2.9%, to ¥8,080.
Some exporters jumped on the weaker yen, with automakers Suzuki Motor gaining ¥96, or 1.9%, to ¥5,147, and Nissan Motor up ¥8.9, or 1.5%, to ¥588.2.
Trading volume on the main section rose to 1,141.96 million shares from Monday’s 1,045.76 million shares.
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