Tokyo’s Topix stock index ends at 31-year high on fresh stimulus hopes
Written by tokyoclub on September 6, 2021
Tokyo’s Topix stock index ended at a 31-year high and the Nikkei at nearly a five-month high Monday on hopes that a possible fresh stimulus package will be proposed by contenders of the ruling Liberal Democratic Party’s leadership race.
The Topix index of all First Section issues on the Tokyo Stock Exchange finished 25.77 points, or 1.28 percent, higher from Friday at 2,041.22, its highest close since Aug. 16, 1990, when the Japanese economy was experiencing an asset-inflated bubble.
File photo taken Oct. 23, 2020, shows the Tokyo Stock Exchange. (Kyodo) ==Kyodo
The 225-issue Nikkei Stock Average ended up 531.78 points, or 1.83 percent, at 29,659.89, closing at its highest level since April 19.
Gainers were led by marine transportation, securities house and machinery issues.
The U.S. dollar was top heavy in the upper 109 yen range as the unit was sold after lower-than-expected U.S. job growth data for August released late last week, dealers said.
The data dampened hopes that the interest rate gap between the United States and Japan will widen, as expectations grew that the U.S. Federal Reserve will not rush to start scaling back its massive bond-buying program that has supported the economy, the dealers said.
Shares extended their winning streak to six days, during which the Topix gained nearly 6 percent and the Nikkei rose over 7 percent.
Following Prime Minister Yoshihide Suga’s abrupt announcement on Friday that he will not run in the LDP’s leadership election on Sept. 29, market sentiment has improved as contenders begin to formulate policies to better cope with the coronavirus pandemic, brokers said.
“The market was lifted by expectations of a new economic relief policy and a change in Japan, such as in its administration and diplomacy if Mr. Kono is elected,” said Shingo Ide, chief equity strategist at NLI Research Institute.
Ide was referring to Taro Kono, the vaccination minister who, according to some media polls, is the most popular figure among the post-Suga LDP hopefuls.
Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co., said, “The upbeat momentum triggered by the positive surprise of Mr. Suga announcing he will step down has continued and prompted buying.”
“An election is a buying catalyst among market anomalies,” Horiuchi said.
The advances were also supported by relatively fewer numbers in new coronavirus cases reported in recent days as well as progress in vaccine rollouts, Horiuchi added.
On the First Section, advancing issues outnumbered decliners 1,554 to 532, while 102 ended unchanged.
Major mobile phone carriers continued their climb from late last week on expectations of business improvement as hopes grew that they will not face further pressure from Suga to lower mobile phone fees.
Nippon Telegraph and Telephone advanced 114 yen, or 3.7 percent, to 3,221 yen, KDDI rose 129 yen, or 3.6 percent, to 3,669 yen and SoftBank added 15.50 yen, or 1.0 percent, to 1,535.50 yen.
Trading volume on the main section fell to 1,176.83 million shares from Friday’s 1,243.10 million shares.