TSE – Nikkei hits highest level since 1990 on US stimulus hopes

TOKYO (Kyodo) — Tokyo stocks advanced Thursday morning, with the benchmark Nikkei extending earlier gains to reach its highest intraday level since August 1990, as Democrats winning U.S. Senate runoff elections in the southern state of Georgia boosted U.S. stimulus hopes.

The 225-issue Nikkei Stock Average rose 497.15 points, or 1.84 percent, from Wednesday to 27,553.09. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 37.27 points, or 2.07 percent, at 1,833.45.

Every industrial category gained ground, led by iron and steel, nonferrous metal and insurance issues.

The U.S. dollar was firmer in the lower 103 yen range after U.S. bond yields jumped in anticipation of a larger U.S. stimulus package, triggering speculation of a widening gap in interest rates between Japan and the United States, dealers said.

At noon, the dollar fetched 103.19-20 yen compared with 103.01-11 yen in New York and 102.74-75 yen in Tokyo at 5 p.m. Wednesday.

The euro was quoted at $1.2325-2325 and 127.18-22 yen against $1.2323-2333 and 126.93-127.03 yen in New York and $1.2339-2340 and 126.77-81 yen in Tokyo late Wednesday afternoon.

Tokyo stocks were strong from the opening after U.S. media said that Democrats won two Senate runoff elections in Georgia, securing the control of the upper chamber needed to help President-elect Joe Biden pursue his policy agenda.

Optimism grew that a Democrat-controlled Senate would pass larger stimulus and infrastructure spending, helping to boost recovery in the world’s largest economy, brokers said.

Markets players were also reassured that Biden’s victory in the Nov. 3 presidential election would not be overturned despite Republican President Donald Trump’s continued attempts to question his win, they said.

“Shares advanced on the back of receding political risks and U.S. stimulus hopes,” said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.

On the First Section, advancing issues outnumbered decliners 1,833 to 303, while 50 ended the morning unchanged.

Financial issues climbed, tracking their U.S. peers on higher bond yields.

Mitsubishi UFJ Financial Group rose 15.60 yen, or 3.4 percent, to 479.50 yen, Sumitomo Mitsui Financial Group advanced 162 yen, or 4.9 percent, to 3,457 yen and Mizuho Financial Group gained 59.50 yen, or 4.4 percent, to 1,412.50 yen.

Shares of insurers were bullish as well, with Dai-ichi Life Holdings soaring 127.50 yen, or 7.9 percent, to 1,737.00 yen. T&D Holdings jumped 109 yen, or 8.6 percent, to 1,374 yen, and MS&AD Insurance Group Holdings increased 149 yen, or 4.7 percent, to 3,306 yen.