Nikkei closes above 30,000, first in 20 months
JAPAN’S Nikkei share average closed above the key psychological 30,000 level for the first time since September 2021 on Wednesday (May 17), buoyed by a weaker yen and momentum from a strong domestic earnings season.
The Nikkei ended the day up 0.84 per cent at 30,093.59 after hitting a high of 30,115.32 in the afternoon session.
The benchmark index has now risen between 0.73 per cent and 0.9 per cent in each of the past four sessions, with the start of the streak coinciding with the peak of the reporting season on Friday.
The broader Topix gained by a more modest 0.3 per cent to 2,133.61, but renewed the 33-year peak reached on Tuesday by rising as high as 2,136.39 at the start of afternoon trading.
“The tailwinds for the Tokyo Stock Exchange are still in place, but there’s a feeling of overheating,” said Kazuo Kamitani, an equity strategist at Nomura Securities.
“Whether it’s today, tomorrow, or next week, the Nikkei is due for a healthy adjustment lower”, potentially to around 28,700, he said.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The Nikkei has climbed more than 3 per cent from Thursday’s close, with its exporter-heavy constituents supported by a revenue-boosting decline of as much as 2.2 per cent in the yen against the dollar.
The domestic earnings season largely wrapped up on Monday and was punctuated by a spate of strong results and several share buybacks during the week-long period.
Daiwa Securities strategist Kenji Abe also noted the strong foreign demand for Japanese equities since April, driven by the Tokyo Stock Exchange’s push for better corporate governance, Warren Buffett’s additional investment in Japanese trading companies, and new Bank of Japan Governor Kazuo Ueda’s dovish stance.
Abe said the Nikkei could hit 31,000 this month, but that would be followed by weakness heading into the summer, with the index potentially touching 27,000 as more signs of a US slowdown emerge. REUTERS
Share with us your feedback on BT's products and services
