Tokyo: Nikkei hits near 1-month high after hopes of a China rebound

[TOKYO] Japanese shares rose on Monday as signs of an economic rebound in China boosted shippers and steelmakers, while worries over a spike in Covid-19 cases in some US states were offset by prospects of more policy support to sustain the recovery.

Japan's Nikkei share average rose 1.83 per cent to 22,714.44, its highest close since June 10. The broader Topix gained 1.60 per cent to 1,577.15.

Cyclical stocks led the gains as Chinese shares jumped more than 5 per cent to a five-year high on hopes of a recovery in the world's second-largest economy.

Shares of securities brokerages jumped 3.3 per cent, while shippers and steelmakers, both strongly leveraged to demand in China, gained 3.3 per cent and 2.7 per cent respectively.

The turnover on the Tokyo Stock Exchange's main board was only 1.801 trillion yen(S$23.3 billion), not far from the lowest level for this year and about 20 per cent below the average.

A spike in virus cases in some US states is seen as a threat to the global economic recovery, even though investors are sticking to hopes that a gradual recovery could continue with steady policy support.

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"The market is looking to see if selective lockdowns implemented by some states will curtail infections within a week or two," said Nobuhiko Kuramochi, market economist at Mizuho Securities.

REUTERS