TOKYO : Japan’s Nikkei share average closed at its highest in 33 years on Monday as gains on Wall Street lifted risk appetite, while investors kept betting on domestic equities on expectations the Bank of Japan would retain its ultra-loose policy.
The Nikkei index jumped 2.2 per cent to end at 32,217.43, its highest close since July 1990 and posted its biggest daily gain since Jan. 18.
The broader Topix advanced 1.7 per cent to 2,219.79.
“The market was supported by the gains in the U.S. market on Friday. That helped keep the money flowing into risk assets in Japan,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
The Japanese equities are in more favorable position than their U.S. peers as the BOJ is expected to maintain ultra low rates. Hence, when U.S. shares rise, there is no reason for not buying Japanese stocks, Kamada added.
The Bank of Japan will hold a two-day policy meeting, starting June 15.
Japanese companies’ ongoing efforts to boost shareholder returns also supported sentiments, Kamada said.
On Friday, U.S. stocks closed higher after a labour market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default.
Among individual stocks in Japan, Uniqlo brand owner Fast Retailing jumped 3.86 per cent. Chip-testing equipment maker Advantest rose 3.38 per cent and robot maker Fanuc advanced 4.53 per cent.
Chip-making equipment makers, which initially tracked declines in the Philadelphia semiconductor index, reversed course, with Tokyo Electron and Screen Holdings rising 0.75 per cent and 1.9 per cent.
All but one of the Tokyo Stock Exchange’s 33-sector sub-indexes rose, with machineries rising 3.12 per cent to lead the gains. Shippers rose 2.86 per cent.
Utilities slipped 0.6 per cent. Tokyo Electric Power Holdings lost 3.64 per cent to become the biggest loser on the Nikkei.
For all the latest business News Click Here
