Nikkei surges to 26-year-high on strong corporate earnings

November 7, 2017

TOKYO- Stocks soared on the Tokyo Stock Exchange Tuesday, lifting the benchmark Nikkei average to the highest closing level in almost 26 years.

The 225-issue average spiraled up 389.25 points, or 1.73 percent, to end at 22,937.60, the level unseen since Jan. 9, 1992, after gaining 9.23 points on Monday. The key market gauge also marked the best finish since the collapse of Japan's bubble economy in the early 1990s.

The TOPIX index of all first-section issues closed up 20.63 points, or 1.15 percent, at 1,813.29, the highest closing since Feb. 26, 2007. The index lost 1.42 points the previous day.

Although the market opened weaker with investor sentiment battered by the dollar's fall below 114 yen, it soon returned to positive territory thanks to bargain hunting and went up on buying encouraged by a series of announcements of strong earnings by Japanese companies, brokers said.

After the Nikkei average surpassed 22,666.80, the then recovery closing high in the postbubble market, foreign investors stepped up purchases of mainstay issues, brokers said.

Investors took heart from "good midterm earnings reports released by Japanese firms on Tuesday," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co.

Robust US stocks and relatively stable dollar-yen rates also made players feel comfortable buying Tokyo stocks, he said.

On Monday, all three key US stock price gauges--the Dow Jones industrial average, the S&P 500 index and the tech-heavy Nasdaq composite index--rewrote record closing highs for the second consecutive session.

Tomoaki Fujii, head of the investment research division at Akatsuki Securities Inc., attributed the Tokyo market's sharp advance to upward revisions by a number of domestic firms in their earnings estimates for the business year through next March. Jiji Press