Nikkei hits 26-Year closing high on firmer US equities

December 11, 2017

Tokyo- Stocks gained further ground on the Tokyo Stock Exchange Monday following continued advance on Wall Street last week, sending the benchmark Nikkei average to the highest level in almost 26 years at the closing.

The 225-issue Nikkei average gained 127.65 points, or 0.56 percent, to end at 22,938.73, the best finish since Jan. 9, 1992. On Friday, the key market gauge soared 313.05 points.

The TOPIX index of all first-section issues finished up 9.61 points, or 0.53 percent, at 1,813.34, the highest closing since Nov. 8 this year. It rose 17.48 points the previous trading day.

The Tokyo market kicked off the week with gains, after the Dow Jones industrial average on the New York Stock Exchange and the S&P 500 index rewrote their closing highs on Friday reflecting the stronger-than-expected US government jobs data for November.

Although both of the Nikkei and TOPIX indexes temporarily sank into negative territory later in the morning due to profit-taking, they returned to the sunny side and gathered steam further in early afternoon trading backed by hopes for the Bank of Japan's buying of exchange-traded funds, brokers said.

"Risk-on sentiment prevailed" in the market, with players encouraged by U.S. stocks' briskness, Hideyuki Suzuki, head of the investment market research department at SBI Securities Co., said.

Suzuki also noted investors took heart from the stability of Chinese stock markets.

Yutaka Miura, senior technical analyst at Mizuho Securities Co., however, blamed weakness in part of the technology sector for the Nikkei's failure to recover 23,000.

The Tokyo market's topside was limited due to selling of semiconductor-related issues reflecting the weaker performance of the Nasdaq composite index, which could not hit a record closing high, than the two other major US market indicators, Miura pointed out.

The dollar's advance against the yen was not powerful enough to push the Nikkei above the psychologically important threshold, he added.

Rising issues outnumbered falling ones 1,345 to 615 in the TSE's first section, while 87 issues were unchanged.

Trading volume plunged to 1,420 million shares, from Friday's 2,005 million shares.

Oil companies JXTG Holdings and Inpex attracted purchases on higher crude oil prices.

Also on the positive side were parts supplier Murata Manufacturing and Torikizoku, which operates pubs offering "yakitori" grilled chicken skewers.

By contrast, Obayashi lost 7.19 percent after it came to light on Saturday that public prosecutors had raided the general contractor for alleged misconduct in tenders for a project related to the magnetic levitation Shinkansen line construction.

Semiconductor-related Tokyo Electron, Sumco and Disco were also downbeat.

In index futures trading on the Osaka Securities Exchange, the key March contract on the Nikkei average grew 100 points to end at 22,890. Jiji Press