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Nikkei ends at 2-month high as traders welcome Powell's speech

TOKYO (Kyodo) -- The Nikkei stock index ended at a two-month high Monday as investor sentiment improved after two major U.S. indices hit record highs late last week following a speech by Federal Reserve Chairman Jerome Powell.

The 225-issue Nikkei Stock Average gained 197.87 points, or 0.88 percent, from Friday to 22,799.64, its highest finish since June 15. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 19.75 points, or 1.16 percent, higher at 1,728.95.

Gainers were led by nonferrous metal, oil and coal product, and electric machinery issues.

Shares were firm throughout the day, tracking gains on Wall Street where the Nasdaq Composite Index and S&P 500 Index hit record highs Friday after Powell said in his speech at a symposium in Jackson Hole, Wyoming, that the Fed would continue to raise interest rates moderately.

Powell's statements confirmed market expectations that the U.S. central bank would increase rates in September and December, brokers said.

While showing confidence in the U.S. economy, Powell added the "U.S. federal funds rate was considerably closer to its longer-run normal," prompting a fall in the long-term U.S. Treasury yield.

"The combination of a strong U.S. economy and lower U.S. Treasury yields is best for the (global) stock market," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

"Lower long-term U.S. interest rates would result in a halt in the plunges of currencies and stock markets in emerging economies and this would create a risk-on mood overall," Fujito added.

On the First Section, advancing issues outnumbered decliners 1,767 to 273 with 65 ending the day unchanged.

Technology issues rose, tracking an upswing in U.S. counterparts. Industrial robot maker Fanuc rose 435 yen, or 2.0 percent, to 21,825 yen, and silicon wafer manufacturer Sumco advanced 54 yen, or 2.8 percent, to 2,014 yen.

Toyota Motor climbed 136 yen, or 2.0 percent, to 6,966 yen after the Nikkei business daily reported Sunday that the Japanese automaker will build a plant in China with an annual production capacity of 200,000 vehicles.

Trading volume on the main section rose to 1,045.83 million shares from Friday's 983.77 million shares.

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