Jiji Press TOKYO (Jiji Press) — 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, a 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 dampened by the dollar’s fall below ¥114, 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 U.S. stocks and relatively stable dollar-yen moves around ¥114 also made players feel comfortable buying Tokyo stocks, he said.
On Monday, all three key U.S. 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.
But observing that the upsurge was led by vigorous futures purchases, Fujii said, “A sell-off might follow.” The market’s ascend was “too fast,” he added.
Rising issues outnumbered falling ones 1,315 to 619 on the TSE’s first section, while 99 issues were unchanged. Volume fell slightly to 1.89 billion shares, from Monday’s 1.93 billion.
Mitsubishi Estate jumped 3.94 percent after the property developer revised up its consolidated operating profit forecast for the year ending March from ¥195 billion to ¥205 billion.
Oil companies Inpex, Japex and Idemitsu were buoyant on a further rise in crude oil prices.
By contrast, drug maker Nippon Shinyaku lost 2.64 percent as its operating profit estimate for the March 2018 term fell short of market expectations.
Also on the minus side were Kobe Steel and chipmaking equipment maker Disco.