At 2018 start, Nikkei logs 1st close above 23,000 in 26 years

January 4, 2018

Tokyo- The benchmark Nikkei average staged a powerful rally on the Tokyo Stock Exchange Thursday, the first trading day of 2018, closing above 23,000 for the first time in 26 years on the back of an overnight advance in U.S. equities.

The 225-issue Nikkei average jumped 741.39 points, or 3.26 percent, to end at 23,506.33, closing above the 23,000 level since Jan. 9, 1992, and marking its best finish since Jan. 7 the same year. On Friday, the key market gauge gave up 19.04 points. The Tokyo market was closed from Monday through Wednesday for New Year holidays.

The TOPIX index of all first-section issues gained 46.26 points, or 2.55 percent, to 1,863.82, the highest closing since Nov. 6, 1991. It fell 1.47 points the previous trading day.

The Tokyo market opened sharply higher after all three major US stock indexes hit their closing highs in New York on Wednesday, with the Nikkei average retaking 23,000 right after the opening bell.

The brisk US stocks reflected stronger-than-expected readings in the US Institute for Supply Management's manufacturing index for December, announced on Wednesday, according to market sources.

Thursday's upsurge in Tokyo stock prices was driven by hefty purchases from foreign investors who returned from extended Christmas holidays, brokers said.

In the afternoon, the market accelerated its upswing thanks to growing hopes for higher stock prices ahead, brokers said.

After the New Year holidays ended, investors bought stocks vigorously "to catch up with (bullish) markets abroad" during the holidays, Hiroaki Hiwada, strategist at Toyo Securities Co., said.

Hiwada noted that the Tokyo market maintained its briskness throughout the session due partly to purchases apparently by hedge funds.

The market attracted buy orders "not only from foreigners but also from domestic investors," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.

Ichikawa said that those investors took heart from the Nikkei's breaking above the psychological threshold of 23,000 from the outset of Thursday's trading.

He also attributed the Tokyo market's sharp rally to stable dollar-yen exchange rate movements.

Rising issues overwhelmed falling ones 1,778 to 246 in the TSE's first section, while 39 issues were unchanged.

Volume increased to 1,690 million shares from Friday's 889 million shares.

Oil companies Japex, Inpex, JXTG, Idemitsu and Showa Shell were upbeat, reflecting higher crude oil prices.

Semiconductor-related Tokyo Electron, Advantest and Sumco attracted robust buying after their US peers fared well in New York on Wednesday.

Blockchain-linked SBI Holdings jumped 19.27 percent on a newspaper report on Thursday that services utilizing the technology, used for digital currencies, are expected be available as early as March at some banks to reduce remittance fees dramatically, brokers said.

By contrast, Daito Trust Construction plunged 6.01 pct following a news report that the condominium builder's consolidated operating profit in October-December is expected to have fallen by some 20 percent from a year before, posting the first year-on-year drop in seven quarters, brokers said.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average jumped 660 points to 23,410. strong>Jiji Press