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Japan: Nikkei 225 index closes at 15-year high

Thursday, February 19, 2015 - 16:40

[TOKYO] Tokyo's Nikkei 225 closed at a 15-year high on Thursday, sitting at a level last seen when Sony's groundbreaking PlayStation 2 hit the shelves, the Dot-com bubble was collapsing and Bill Clinton still occupied the White House.

The benchmark index at the Tokyo Stock Exchange rose 0.36 per cent, or 65.62 points, to 18,264.79, its best finish since May 2000, while the broader Topix index of all first-section shares climbed 0.83 per cent, or 12.26 points, to 1,494.93.

Wall Street closed nearly flat on Wednesday, but Tokyo has been taking a strong lead from the United States, where shares have been hitting new records, while a sharply weaker yen has inflated profits for many of Japan's biggest firms.

Buying was boosted Thursday by upbeat Japanese trade data and cautious optimism over a solution to the Greek debt standoff.

"Easing concerns over the Greek problem, a strong US stock market, and the yen's relative weakness - overall market conditions are upbeat," Hiroaki Hiwata, a strategist at Toyo Securities, told AFP.

The Nikkei finished 2014 just short of its highest level since before the global financial crisis and in 2013 surged 57 per cent - its best annual return in four decades, helped by Prime Minister Shinzo Abe's growth blitz.

The Nikkei was below 10,000 when Abe came to power.

In 2000, Japan was about a decade into a long-term economic malaise after a property and stock market bubble drove the Nikkei to an all-time high of almost 39,000 in the last days of 1989.

"This level could be viewed as the winding-up of Japan's lost two decades," Mr Hiwata said.

Shortly before Tokyo opened on Thursday, official data showed that surging exports helped cut Japan's trade deficit by more than half in January, a day after the central bank said the world's number three economy was on the mend.

On Monday, separate data showed Japan crawled out of recession in the fourth-quarter, offering some hope for Mr Abe's efforts, after a sales tax rise last year hammered consumer spending and threw his programme into doubt.

Investors are also keeping a close eye on Greece, which is due to make a formal request for a loan extension from eurozone finance ministers Thursday.

Athens is expected to send a letter to Jeroen Dijsselbloem, head of the Eurogroup of EU finance ministers, to request an extension of up to six months on its European loan agreement that would sidestep the duties of a full-blown bailout, but avoid a default and Greek exit from the eurozone.

Banks led Thursday's stock gains. Mitsubishi UFJ, the country's biggest lender, jumped 3.62 per cent to 770.2 yen, while rival Mizuho Financial Group was up 3.61 per cent at 218.2 yen.

"We're seeing a massive catch-up rally by the megabanks this month, which is powering the Nikkei 225," David Welch, head of equity sales trading at Reorient Group, told Bloomberg News.

Sony climbed 1.65 per cent to 3,227.0 yen after forecasting a jump in operating profit as it looks to move past years of losses.

AFP