Nikkei cruises to 34-year peak, briefly breaching 38,000 range
TOKYO —Japan’s Nikkei share average closed at a fresh 34-year high on Tuesday as trading resumed after a long holiday weekend, with tech-related shares and strong corporate earnings supporting the benchmark stock index.
The Nikkei climbed 2.89 percent to 37,963.97 to its highest since January 1990, after briefly breaching 38,000 points.
The broader Topix rose 2.12 percent.
Chip-sector giant Tokyo Electron Ltd gained 13.33 percent, making it the best performer of the day.
SoftBank Group Corp rose 6.27 percent, buoyed by the rally in semiconductor developer ARM Holdings shares, in which SoftBank has a 90-percent stake.
Among other top gainers, Tokio Marine Holdings Inc and MS&AD Insurance Group Holdings Inc gained 11 percent and 10.82 percent, respectively.
Article continues after this advertisementJapanese equities also received a boost from a strong performance on Wall Street and a weakened yen, boosting the value of overseas revenue for exporters.
Article continues after this advertisementOutlook for Japanese equities
The yen traded around 149.47 per dollar during the session.
READ: New highs for Nikkei, Hong Kong limps to holiday break
“We have raised our outlook for Japanese equities in 2024 (from 2,500 to 2,650 for TOPIX, from 35,000 to 37,000 for the Nikkei 225), taking into account changes in macroeconomic conditions, including the yen weakening early in the year, and progress on structural reforms,” wrote J.P. Morgan analysts in a note earlier this month.
Out of the index’s 225 constituents, 196 gained, while 26 declined.
As the Nikkei climbs toward its all-time high, the U.S. consumer price index (CPI) report out later on Tuesday will be in focus.
“Nikkei moves have been more closely tied to the yen recently, suggesting that any yen strength on the back of U.S. CPI release today, or signs of verbal intervention, could tactically disrupt the rally in Nikkei,” said Charu Chanana, head of currency strategy at Saxo Markets.
Otsuka Holdings was among the decliners, shedding 5.05 percent after the company said its experimental drug failed to meet a primary late-stage trial goal in treating agitation associated with dementia due to Alzheimer’s disease.
