Tokyo stocks close sharply higher on hopes for economic revivals

A pedestrian walks past a stock indicator board for the Tokyo Stock Exchange being displayed in a window of a securities company in Tokyo on October 1, 2018. - Japanese shares powered to a new 27-year high on October 1 after the US and Canada clinched a long-awaited trade deal, but other Asian equity markets struggled in subdued holiday trading. (Photo by Martin BUREAU / AFP)

Tokyo stocks closed sharply higher Thursday, as the market mood continued to be buoyed by ongoing hopes for increased economic activity in countries where virus-linked restrictions have been eased.

The 225-issue Nikkei Stock Average gained 497.08 points, or 2.32 percent, from Wednesday to close the day at 21,916.31, marking its highest closing level since Feb. 27.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 27.87 points, or 1.80 percent, higher at 1,577.34.

Trading got off to a bright start, local brokers said, tracking U.S. shares’ advances overnight, as expectations for an economic revival worldwide as more countries ease virus-related restrictions underpinned the market.

They added that in terms of Japan, the cabinet a day earlier approving a record supplementary budget to the tune of 31.91 trillion yen (296 billion U.S. dollars) for the fiscal year through next March to help mitigate the downside effects of the global pandemic, also fed into the market’s upbeat mood, underscored by Japanese Prime Minister Shinzo Abe‘s pledge to “defend the economy against this once-in-a-century crisis.”

“Rallies in U.S. and European markets and Japan’s stimulus are helping the market. As investors see a bottom-out in the economy, it is natural for them to buy cyclical and value stocks,” Seiki Orimi, senior strategist at Mitsubishi UFJ Morgan Stanley Securities, was quoted as saying.

Financial issues gained on expectations of increased business as global economies’ reopening begin to show fiscal results, with transportation issues extending their rally on hopes for increased patronage following Japan fully lifting its virus restrictions on Monday, market strategists here said.

In terms of individual issues finding favor, Nissan Motor accelerated 8.2 percent and Mitsubishi Motor gained 6.4 percent, after the two automakers, along with alliance partner Renault, announced a streamlining plan involving cost-cutting initiatives as part of the alliance’s revival.

Advertising giant Dentsu Group soared 16.4 percent, after reporting its net profit in the January-March quarter had returned to the black from hefty losses booked in the previous year.

Recruit Holdings climbed 7.0 percent, after announcing its group net profit for the fiscal year ended in March increased from a year earlier on a significant rise in revenue in the period.

By the close of play, iron and steel, bank and transportation equipment issues comprised those that gained the most, and issues that rose outpaced those that fell by 1,530 to 583 on the First Section, while 53 ended the day unchanged.

On the main section on Thursday, 2.087 billion shares changed hands, rising from Wednesday’s volume of 1.763 billion shares.

The turnover on the penultimate trading day of the week came to 3.381 trillion yen (31.384 billion U.S. dollars).

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