TOKYO, Sept 11: Japan’s Nikkei average rose to a seven-week high on Wednesday morning, following a positive close on Wall Street and the yen’s slide against the dollar, with easing worries over Syria and upbeat Chinese data aiding sentiment.
The benchmark Nikkei rose 0.7 percent to 14,526.21, its highest since July 25, in mid-morning trade. The index climbed 4.1 percent over the past two trading days, buoyed by euphoria over Tokyo’s winning bid for the 2020 Olympics and Japan’s strong second-quarter growth.
The broader Topix added 0.5 percent to 1,196.39. Trading was fairly active by mid-morning, with volume on the Topix at 53.8 percent of its full daily average for the past 90 days.
‘Global investors have turned to risk-on on the back of rising hopes for a diplomatic solution to the Syrian crisis, which drove the yen lower (to the dollar) and sent stocks higher,’ said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.
‘Although some Olympics-related shares were hit by profit-taking today, hosting the (2020 Summer) Games itself is a positive for Japanese stocks in the long term. It really changed the momentum of the market,’ Akino added.
U.S. Stocks rose on Tuesday, with the S&P 500 index advancing for its longest stretch since early July, as an alternative proposal emerged that could avert a possible Western military strike on Syria and Chinese economic data reinforced the view the world’s second-largest economy was stabilising.
The dollar rose to as high as 100.55 yen on trading platform EBS on Wednesday, its highest level versus the Japanese currency since July 22.
As a weaker yen tends to make export-reliant Japan’s products more competitive in the global market, automakers gained ground. Toyota Motor Corp rose 0.8 percent, Mitsubishi Motors Corp jumped 6.2 percent and Mazda Motor Corp advanced 2.2 percent.
Construction shares, which led the recent rally on Tokyo’s successful Olympics bid, lost ground. Taisei Corp shed 1.7 percent to become the most traded stock on the main board and Kajima Corp retreated 1.6 percent.
Ichiyoshi’s Akino predicts the benchmark Nikkei will reach 15,000 by the end of September. ‘I think most foreign institutional investors are still sitting on the sidelines but they may return to the Tokyo market as early as next week.’
The Nikkei is up 40 percent this year, spurred by the government’s expansionary fiscal policy and the Bank of Japan’s aggressive monetary stimulus, but is down 9 percent since its May peak.
(AGENCIES)
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