Tokyo Stocks End at 30-year High on Global Economic Recovery Hopes

People look at an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo on Monday. Photo: AP/Eugene Hoshiko
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Tokyo stocks end at a 30-year high on global economic recovery hopes
TOKYO
Tokyo stocks rose sharply Monday, with the key indexes closing at 30-year highs, as hopes for a global economic recovery grew after the United States made progress in preparing a massive stimulus package to deal with the impact of the coronavirus pandemic.
The 225-issue Nikkei Stock Average ended up 609.31 points, or 2.12 percent, from Friday at 29,388.50, its highest close since Aug. 3, 1990. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 33 points, or 1.75 percent, at 1,923.95, the highest since June 5, 1991.
The total market capitalization of companies listed on the First Section reached a record 712 trillion yen ($6.7 trillion). Gainers were led by iron and steel, mining, and marine transportation issues.
But the robustness in the market also stoked fears that share prices have been rising at a pace that does not reflect the fundamentals of the economy, which is still struggling with the fallout from the pandemic.
Analysts have warned that ample liquidity provided by major central banks under their massive monetary easing campaigns has triggered such an excessive rise in the market.
The yield on the benchmark 10-year Japanese government bond hit the highest level in over 10 months at 0.065 percent, up 0.010 percentage point from Friday's close, as the safe-haven debt was sold on a sharp rise in Tokyo stocks.
The U.S. dollar fluctuated narrowly in the mid-105 yen range throughout the day as Friday's disappointing U.S. jobs data for January pressed market players to await further developments on the stimulus package.
At 5 p.m., the dollar fetched 105.48-49 yen compared with 105.32-42 yen in New York and 105.49-50 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.2040-2041 and 127.00-04 yen against $1.2045-2055 and 126.92-127.02 yen in New York and $1.1963-1965 and 126.20-24 yen in Tokyo late Friday afternoon.
Tokyo stocks kept an upbeat tone throughout the day.
The Nikkei topped the psychologically important 29,000 level threshold early in the morning, accelerating the pace of increase toward the end of the session. Investor sentiment also improved on gains in U.S. stock futures in after-hours trading and solid Asian stock markets.
“Market players are growing optimistic that the U.S. stimulus plan would be enacted in the next two to three weeks,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
But he also said, “It was an uncomfortable rise in stocks, given the recent rapid increase in stock prices.”
On Friday, U.S. lawmakers approved a budget outline that will allow President Joe Biden and his Democratic allies in Congress to move forward on the economic relief plan without Republican support, beginning the process of turning the proposal into legislation.
Brokers project that the upward trend will continue for a while, underpinned by positive earnings in Japan and overseas, with many companies upgrading their profit estimates.
“Now it is well within our sight that the Nikkei will reach the 30,000 level,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
On the First Section, advancing issues outnumbered decliners 1,710 to 429, while 52 ended unchanged.
Steelmakers and shippers climbed on expectations of recovering demand amid the improving global economic outlook.
Kobe Steel soared 94 yen, or 17.5 percent, to 632 yen, while its rival JFE Holdings jumped 74 yen, or 7.4 percent, to 1,078 yen.
Among shipping firms, Nippon Yusen climbed 164 yen, or 5.9 percent, to 2,950 yen and Kawasaki Kisen gained 83 yen, or 4.4 percent, to 1,969 yen.
Trading volume on the main section rose to 1,585.95 million shares from Friday's 1,537.27 million shares.