TSE – Nikkei ends above 28,000 for first time since August 1990

Tokyo stocks continued to surge Friday after an overnight upswing on Wall Street, with the benchmark Nikkei average closing above 28,000 for the first time in over 30 years.

The 225-issue Nikkei average of the Tokyo Stock Exchange climbed 648.90 points, or 2.36%, to close at 28,139.03, the first finish above the 28,000 line since Aug. 15, 1990, and the highest closing level since Aug. 8 the same year. On Thursday, the benchmark index advanced 434.19 points.

The Topix index of all first section issues ended up for the third straight day, rising 28.64 points, or 1.57%, at 1,854.94, after gaining 30.12 points the previous day.

The Tokyo market shot up at the opening bell after all three major U.S. stock indexes, including the Dow Jones Industrial Average, posted record closing highs the day before, following the U.S. Congress’ official certification of Joe Biden’s victory in the presidential election.

Better-than-expected U.S. nonmanufacturing purchasing managers’ index for December also brightened U.S. market sentiment.

Tokyo stocks were underpinned by purchases in anticipation of further gains, especially before the Tokyo market enters a three-day weekend, brokers said. The market will be closed on Monday for a national holiday.

Market players played catch-up as many, including foreign investors, have only recently resumed trading after the new year holidays, Masayuki Otani, chief market analyst at Securities Japan Inc., said.

“The market’s rise is also viewed as a rebound from the Nikkei’s four-day slide straddling the turn of the year, so the gains were expected,” Otani added.

“There is a cycle of ‘buying because of the rise’ followed by ‘rising because of the buying,’” Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said.

In the TSE first section, gainers far outnumbered losers 1,725 to 384 while 77 issues were unchanged. Volume fell to 1.389 billion shares from Thursday’s 1.513 billion shares.

Chipmaking gear maker Tokyo Electron and semiconductor test device manufacturer Advantest rose 3.91% and 4.72%, respectively, after the SOX Philadelphia semiconductor index jumped overnight.

Cyclicals such as materials issues gained ground as well, with Nippon Paper closing up 4.09%.

Other major winners included tire maker Bridgestone and drugmaker Chugai.

By contrast, airlines JAL and ANA succumbed to selling on concerns over the effects of the government’s coronavirus state of emergency over the Tokyo metropolitan area from Friday.

Optical equipment-maker Olympus also fell, sliding 2.10%.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average surged 700 points to 28,140.