Japan’s Nikkei jumps past 65,000 mark for first time on Iran talks optimism
The broader Topix climbed 1.29% to 3,942.57
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[TOKYO] Japan’s Nikkei share average surged past the 65,000 level for the first time on Monday (May 25), as optimism for a deal to end the war in Iran boosted demand for risk assets.
The benchmark Nikkei 225 Index jumped 2.87 per cent to close at 65,158.19 after touching an intraday record of 65,408.87. Its 8.95 per cent advance over the past three sessions was the steepest three-day gain in more than six years. The broader Topix climbed 1.29 per cent to 3,942.57.
Japan’s dependence on imported energy has made its economy vulnerable to a surge in oil prices caused by the nearly three-month conflict between the United States, Israel and Iran.
US President Donald Trump said over the weekend that Washington and Iran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz shipping lane for petroleum. He later said that he had told his representatives not to rush into any deal.
The news sparked a drop in oil prices along with gains in Japanese government bonds and the yen, adding to signs of improving risk sentiment, said Maki Sawada, an equities strategist at Nomura Securities.
“Even if an agreement is reached, there remains uncertainty regarding whether it will be adhered to, as the Iranian government may not be united on the issue,” Sawada said.
“The 65,000 mark is a psychological milestone, so reaching this level has led to some caution and selling pressure at such a high price range.”
There were 141 advancers on the Nikkei index against 83 decliners. Shares related to the red-hot AI sector, which is vulnerable to oil prices due to the enormous energy costs in computing, were among the steepest gainers. Lasertec, a semiconductor inspection equipment maker, and Fujikura, a cables and optical fibre producer, both jumped more than 11 per cent.
The largest losers were Archion, down 8.4 per cent, followed by Pan Pacific International, down 4.9 per cent, and Aeon, which slid 4.8 per cent. REUTERS
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