Nikkei ends nearly 3% higher on renewed hopes for Middle East peace

[TOKYO] Japan’s Nikkei share average ended nearly 3 per cent higher on Friday (Jun 12), as investors scooped up stocks after US President Donald Trump touted a possible peace deal with Iran.

The Nikkei closed up 2.81 per cent at 66,020.04 after rising as much as 4.4 per cent earlier in the session. In a volatile week, the index was down 0.85 per cent for the week, snapping a three-week winning streak.

The broader Topix gained 1.35 per cent to 3,881.96. Trump on Thursday said the US and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping, but Iran countered that it had not reached a final decision on an agreement.

Chip-related shares led the Nikkei’s gain, with Advantest and Tokyo Electron jumping 8.54 per cent and 7.26 per cent, respectively. Bank shares rose ahead of the Bank of Japan’s policy meeting next week, where the central bank is set to raise the policy rate to a 31-year high of 1 per cent.

Mitsubishi UFJ Financial Group and Mizuho Financial Group rose 0.67 per cent and 2.29 per cent, respectively. For the year so far, the bank index is up 30 per cent and at the same level as in mid-February, before the Middle East war broke out.

It underperforms a 68 per cent gain of the nonferrous sector, where makers of fibre-optic cables such as Fujikura and Furukawa Electric, used by AI data centres, belong.

SEE ALSO

Asian stocks joins global rally on US-Iran breakthrough hopes

Wall Street indexes jump, Trump says strikes against Iran cancelled

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

“This signals the instability of the equity market. Investors have not yet started rotating their targets toward a wide variety of stocks,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

Staffing agency Recruit Holdings and electronic component maker Murata Manufacturing fell 3.27 per cent and 4.58 per cent, respectively, to weigh on the Nikkei the most.

Camera and audio equipment maker Sony Group fell 2.29 per cent. REUTERS