Nikkei ends at new record high as high-profit hopes rise

TOKYO (Kyodo) — Tokyo’s Nikkei composite closed at an all-time high on Tuesday, boosted by rising expectations for strong corporate earnings in the United States and Japan.

The 225-stock Nikkei Stock Average posted its biggest daily point gain since April 24, ending up 799.47 points, or 1.96 percent, from Monday’s level of 41,580.17. The broader Topix ended the day 27.94 points, or 0.97 percent, higher at 2,895.55.

On the top primary market, the biggest gainers were companies from the electrical equipment, non-ferrous metals and precision instruments sectors.

The U.S. dollar was trading slightly near the 161 yen mark amid anticipation ahead of Federal Reserve Chairman Jerome Powell’s testimony on Tuesday and Wednesday, traders said.

At 5 p.m. the dollar was trading at 160.91-92 yen, while in New York the rate was 160.79-89 yen and in Tokyo 160.90-91 yen at 5 p.m. on Monday.

The euro was trading at $1.0817-0818 and 174.06-10 yen against $1.0819-0829 and 174.01-11 yen in New York and $1.0837-0838 and 174.37-41 yen in Tokyo late Monday afternoon.

The yield on 10-year Japanese government bonds fell 0.015 percentage points from Monday’s level of 1.070 percent as investors bought the bonds after an auction of five-year bonds announced by the Finance Ministry was met with strong demand.

Stocks rose on Wednesday amid concerns about the semiconductor sector after the Nasdaq tech index closed the session at a record high.

Investors also bought bonds of exporting companies, including machinery makers, as the yen’s recent weakness fueled optimism about corporate earnings reports for the April-June period, due later this month.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., said investors were “buying on optimism” ahead of strong quarterly results in both Japan and the United States.

“Since the last week of June, foreign investors have significantly increased their purchases of futures contracts,” and this was likely the reason for today’s price increase, Ichikawa added.

Corporate earnings reports will begin arriving later this week in the United States and later this month in Japan.