TOKYO, Sept 6 (Reuters) – Japan’s Topix index hit its highest level in more than three decades on Monday, while the Nikkei also jumped, as investors continued to buy beaten down stocks on hopes of an economic recovery and corporate earnings growth.
The Nikkei share average climbed 1.51% to 29,566.67 by 0202 GMT, while the broader Topix jumped 1.08% to 2,037.20, its highest since August 1990.
Japan’s market built on its Friday’s upbeat momentum after Prime Minister Yoshihide Suga offered to resign, raising hopes that the ruling coalition could win an upcoming election and avoid political turmoil.
“Investors are now in the process of adjusting their positions of Japanese stocks which were underweighed because of the country’s low vaccination rate and resurgence of the COVID-19 infections,” said Soichiro Matsumoto, chief investment officer Japan at Credit Suisse Private Banking.
“But, the vaccination rate will soon match with that of U.S. and Europe and the higher ratio would drive an economic reopening. Towards the end of the year, we can expect more companies to raise their forecast.”
Most of the 33 sector sub-indexes on the Tokyo exchange traded higher, with shippers surging 8.77%, while financial sectors also gained 2.36% and 2.16%, respectively.
Chip-related shares tracked the Nasdaq, which hit its peak on Friday. Tokyo Electron jumped 2.02% and Advantest gained 1.58%.
Phone companies, which were under pressure to cut rates under the Suga administration, also rose, with KDDI jumping 4.66% and Nippon Telegraph and Telephone gaining 2.86%.
Kawasaki Kisen Kaisha was the top gainer on the Nikkei, with a 9.23% jump, followed by Nippon Yusen gaining 9.06% and Alps Alpine, rising 6.27%.
Kansai Electric Power, which fell 3.31%, was the worst performer on the index, followed by Rakuten Group , losing 1.88%, and Chubu Electric Power, which was down 1.68%.
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