The 225-issue Nikkei Stock Average closed at a fresh high in Tokyo as strong earnings from the tech and finance sectors drove optimism, and as a recovery in gold prices revived risk appetite across Asia.
The Nikkei rebounded from Monday¡¯s drop to rise 3.9%, closing at a record 54,720.66. The broader Topix index also advanced 3.1%, marking the biggest gain for both benchmarks since Oct. 6.
Tech-related firms like TDK and Kyocera were among the Nikkei¡¯s top gainers after their quarterly earnings exceeded market expectations. Artificial intelligence names such as Fujikura and Ibiden were also strong amid widespread risk-on sentiment.
Banks helped support the Topix, with Mizuho Financial Group climbing 6.1% after its profit beat estimates and Japan¡¯s third-largest lender expanded its share buyback program.
¡°All caution seems to have vanished,¡± said Kazuhiro Sasaki, head of research at Phillip Securities Japan. ¡°The yen is considerably weaker than last week, Japan¡¯s ruling party looks on track to win big in the election, and earnings from key sectors like semiconductors appear strong,¡± he said, referring to the snap vote on Feb. 8.
Relative calm in the precious metals market after the weekend¡¯s rout is also bolstering investor confidence, Sasaki added.
Better-than-expected data on U.S. manufacturing activity also fueled market sentiment, wrote Andrew Jackson, Japan equity strategist at Ortus Advisors, in a note. Risk is ¡°back on the menu¡± now, especially for tech names after gains in the U.S. on Monday, he said.
Strong earnings from AI-related Japanese firms boosted the benchmarks further in the afternoon session. Cable maker Sumitomo Electric Industries gained as much as 15% after raising its full-year income forecast in results released at 3 p.m.
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