The Nikkei surged to extend its winning streak to a fifth session Thursday, rewriting a 31-year high above 28,500.
The 225-issue Nikkei average of the Tokyo Stock Exchange climbed 241.67 points, or 0.85%, to close at 28,698.26, the highest finish since Aug. 3, 1990. The benchmark index soared 292.25 points Wednesday.
The Topix index of all first section issues closed 8.88 points, or 0.48%, higher at 1,873.28 in its six-session bull run, after gaining 6.46 points the previous day.
The market got off to a weaker start after the U.S. Dow Jones Industrial Average turned lower Tuesday. But it soon regained strength as Dow futures rebounded in off-hours trading and investors moved to buy the dip.
Better-than-expected Japanese core machinery orders in November last year, released right before the opening bell, also heartened market players.
Stocks gained further ground around noon on media reports that U.S. President-elect Joe Biden was about to announce a $2 trillion fresh coronavirus relief package, brokers said.
Buying sentiment grew further to push up the Nikkei average close to 29,000 in midafternoon trading.
The market, however, lost steam toward the closing, as profit-taking pressure built up amid the spread of caution over high prices.
“With U.S. economic indicators, such as nonfarm payrolls, showing signs of a slowdown in recovery from the coronavirus crisis, investors are increasingly pinning hopes on Biden’s stimulus measures,” said Hirohumi Yamamoto, strategist at Toyo Securities Co.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said the envisaged fresh relief package helped reinforce investor expectations for higher prices ahead.
But at the same time, participants realized that stocks were rising too fast, an official at a bank-affiliated brokerage house noted.
“Sentiment has been overly optimistic,” another brokerage official said.
Despite the Nikkei’s powerful advance, decliners outnumbered gainers 1,090 to 1,000 on the TSE first section, while 98 issues were unchanged. Volume rose to 1.413 billion shares from Wednesday’s 1.239 billion shares.
Industrial robot-maker Yaskawa Electric went up 5.30% on continued buying since revising up its earnings forecasts for the year ending next month. Its peer Fanuc rose 2.21%.
SoftBank Group gained 2.93% on media reports that a U.S. investment ban will not be applied to Chinese e-commerce giant Alibaba Group Holding, in which the Japanese technology investor holds a large stake.
Tire-maker Bridgestone and security firm Secom also attracted buying.
On the other hand, stocks in the semiconductor sector, such as chipmaking gear-maker Tokyo Electron and test device manufacturer Advantest, fell back.
Shipping firms Mitsui O.S.K. Lines and Kawasaki Kisen were downbeat as well.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average jumped 350 points to 28,810.
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