TSE – Nikkei ends at 30-yr high as 4-day streak extends on solid chip stocks

TOKYO (Kyodo) — Tokyo stocks rose Wednesday, with the Nikkei index ending at its highest level in more than 30 years, as a four-day winning streak continued on sharp gains by chip-related shares.

The 225-issue Nikkei Stock Average ended up 292.25 points, or 1.04 percent, from Tuesday at 28,456.59, the highest close since August 1990. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 6.46 points, or 0.35 percent, higher at 1,864.40.

Gainers were led by mining, oil and coal product, marine transportation and chip-related firms.

The U.S. dollar was under pressure in the upper 103 yen zone as a fall in the yield on the benchmark 10-year U.S. Treasury after a rise to a 10-month high reduced expectations of a widening U.S.-Japan interest-rate gap.

At 5 p.m., the dollar fetched 103.68-69 yen compared with 103.69-79 yen in New York and 104.15-17 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.2203-2204 and 126.52-56 yen against $1.2202-2212 and 126.58-68 yen in New York and $1.2163-2164 and 126.68-72 yen in Tokyo late Tuesday afternoon.

The yield on the benchmark 10-year Japanese government bond fell 0.005 percentage point from Tuesday’s close to 0.025 percent as investors bought the debt after a fall in the U.S. Treasury yield overnight. Bond yields move inversely to prices.

After a 4 percent increase over the three trading days through Tuesday, the Nikkei moved in a narrow range in the morning but extended gains toward the end of the day.

“Buying was focused on semiconductor-related companies amid strong demand for chips and expectations of positive earnings after U.S. Micron Technology reported solid results,” said Chihiro Ota, assistant general manager of investment research at SMBC Nikko Securities.

The market shrugged off the expansion of Japan’s coronavirus emergency declaration from the Tokyo metropolitan area to seven more prefectures including Osaka and Aichi. Market players expect vaccines will help and that the government’s fiscal support will be more effective than the previous measures taken when the first emergency was declared last April, Ota said.

Prime Minister Yoshihide Suga is set to declare a state of emergency in seven additional prefectures later Wednesday.

“The economic recovery may take time because of the state of emergency, but it does not mean the recovery will not happen,” he said.

On the First Section, advancing issues outnumbered decliners 1,232 to 856, while 98 ended unchanged.

Chip-manufacturing equipment makers were mostly higher with Tokyo Electron jumping 2,150 yen, or 5.3 percent, to 42,950 yen and Advantest surging 450 yen, or 5.4 percent, to 8,710 yen. Screen Holdings climbed 270 yen, or 3.3 percent, to 8,380 yen.

Yaskawa Electric advanced 240 yen, or 4.4 percent, to 5,660 yen after the industrial robot producer raised its forecast for the year through February on a recovery in demand in the auto market, especially in China.

Industrial robot maker Fanuc rose 230 yen, or 0.9 percent, to 27,075 yen and machine tool maker Okuma gained 70 yen, or 1.2 percent, to 6,110 yen.

Trading volume on the main section fell to 1,239.56 million shares from Tuesday’s 1,335.47 million shares.