Japan’s Nikkei breaks 35,000 for first time since Feb 1990
People walk in front of an electronic board showing Japan’s Nikkei average outside a brokerage in Tokyo, Japan, April 13, 2016. REUTERS/Toru Hanai/File photo
TOKYO – Japan’s Nikkei share average, on Thursday, reached its highest since February 1990, as a weaker yen buoyed exporters and caution over an impending hike by the Bank of Japan continued to fade on the back of weak wage data.
The Nikkei was up 1.94 percent at 35,110.52 by the mid-day close. The index is on track for a third straight day of gains and closing in on its largest weekly rise since late March 2020.
The broader Topix was up 1.81 percent at 2488.65.
READ: Nikkei rides high while traders wait on US inflation
The strong earthquake that hit western Japan last week and weak wage growth data are forcing market participants to “reappraise” when the Bank of Japan (BOJ) will normalize its monetary policy, said Tony Sycamore, a market analyst at IG.
Workers’ real wages shrank for a 20th straight month in November, according to data published on Wednesday, confounding officials’ wishes to see wage gains before tightening policy.
READ: Japan’s Nov real wages down for 20th straight month
“That (wage data) gave the Nikkei the excuse to pop up there, towards that 35,000 level,” said Sycamore, adding the Nikkei “probably can continue to make good gains while we try and work out when the BOJ can look to take its next step.”
Yen vs dollar
The yen fell 0.9 percent on the U.S. dollar overnight in the wake of the data and was hovering around 145.56 per dollar in morning trade.
A weaker yen tends to support exporter shares, increasing the value of overseas profits in yen terms when firms repatriate them to Japan.
READ: Dollar heads for strongest week since July, yen on back foot
Japanese stocks also got a boost from a good day on Wall Street as megacaps rallied.
SMC Corp’s 5.07 percent gain led the top performers, followed by Itochu Corp at 4.83 percent and Hitachi Ltd at 4.58 percent.
The biggest losers were Yamato Holdings, down 2.78 percent, followed by Rakuten Group losing 2.58 percent and Shiseido down by 1.31 percent.
There were 202 advancers on the Nikkei index against 23 decliners.
