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Tokyo: Nikkei nears 2-year high on strength of tech shares
[TOKYO] Japan's Nikkei share average neared two-year highs on Thursday after Wall Street rebounded, with tech shares such as Advantest Corp and Shin-Etsu Chemical outperforming the overall market.
The Nikkei gained 0.45 per cent to 20,220.30, moving closer to 20,318.11 hit last week, the highest level since August 2015.
The broader Topix ended the day 0.6 per cent higher at 1,624.07 after brushing a two-year high of 1,627.54.
Tech shares, which stumbled the previous day, rebounded after the Nasdaq overnight posted its best session since Nov 7. Gains in the Philadelphia Semiconductor Index also bolstered sentiment in the Japanese tech sector.
Advantest rose 0.8 per cent, Hitachi Ltd added 1.3 per cent and Shin-Etsu Chemical Co, a top maker of semiconductor silicon wafers, advanced 1 per cent.
"We see reversals in some sectors today. For the overall market, investors are still waiting for major catalysts from next week as well as this weekend's Tokyo poll," said Nobuhiko Kuramochi, a strategist at Mizuho Securities, referring to Sunday's Tokyo Metropolitan assembly election.
Japanese Prime Minister Shinzo Abe's government, its ratings slipping over suspicions of favouritism, has suffered a fresh embarrassment after his defence minister made politically sensitive remarks just days ahead of a key local election.
"It's not like the market is deeply worried about the election. But from foreign investors' standpoint, political stability was one of the reasons to invest in the Japanese market, so we don't want a negative surprise on the weekend," Mizuho's Kuramochi said.
Bucking Thursday's strength, Nitori Holdings tumbled 6.8 per cent after the furniture retailer saw its operating profit decline 5.6 per cent to 25.72 billion yen (S$316.3 million) in March-May, hurt by a weaker yen and expenses related to new store openings.