Tokyo: Stocks hit highest in more than 3 months on economic hopes

[TOKYO] Japanese shares hit a more than three-month high on Tuesday as hopes for a global economic recovery bolstered expectations for a rebound in corporate earnings, with more countries gradually reopening after coronavirus-related lockdowns.

The Nikkei index ended 1.19 per cent higher at 22,325.61 points after earlier rising to its highest level since Feb 26. Industrial and technology shares led the advance.

Japanese stocks also got a boost from overnight Wall Street gains, after US manufacturing data suggested the worst of the sector's virus-related slump may be over.

The Nikkei has rallied around 36 per cent from its low of March 16 as coronavirus infections in Japan fell, prompting the officials to remove lockdown restrictions and allow more retailers to resume operations.

However, some investors remain cautious due to uncertainty caused by mass protests in the United States against police brutality and diplomatic tension between Washington and Beijing over civil liberties in Hong Kong.

"Hopes for economic recovery are supporting gains in Japanese stocks," Hideyuki Ishiguro, senior strategist at Daiwa Securities in Tokyo.

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"In the bigger picture, equity markets have stopped reacting to negative news. Many investors were short in futures and now they are losing money. These players are being forced to buy back."

There were 196 advancers on the Nikkei index against 27 decliners on Tuesday.

The largest percentage gainers in the index were printer and medical imaging company Konica Minolta, up 6.11 per cent, followed by beer maker Asahi Group Holdings, gaining 5.52 per cent, and industrial machinery maker IHI Corp, up by 5.47 per cent.

The largest percentage losses in the index were drugmaker Daiichi Sankyo, down 4.38 per cent, followed by Astellas Pharma, losing 1.88 per cent, and Kansai Electric Power, down by 1.27 per cent.

The broader Topix index rose 1.21 per cent to 1,587.68.

The volume of shares traded on the Tokyo Stock Exchange's main board was 1.16 billion, compared to the average of 1.38 billion in the past 30 days.

REUTERS