TOKYO: Japan's Nikkei share average scaled a near six-month high on Thursday, driven by strong gains in technology shares, with investors sticking to hopes that Washington will deliver stimulus even as talks between US lawmakers stall. The Nikkei rose 1.78% to 23,249.61, its highest since Feb. 21 and has almost recovered all losses since the start of the Covid-19 pandemic. The broader Topix rose 1.16% to 1,624.15, closing in on its June peak.
Topix value rose just 0.56%, trailing a 1.68% gain in Topix growth. Technology shares, including semiconductor-related stocks, advanced on hopes for more chip demand related to new technologies, such as 5G communication, after strong gains in global peers.
Chip-making machine maker Tokyo Electron rose 3.1% and Murata Manufacturing, manufacturer of capacitors and other electronic parts, added 2.6%. Precision machine makers, up 3.23%, were the top performers among the 33 Topix industry subindexes. Olympus jumped 3.9% to a record high, while Terumo rose 4.5%.
Upbeat earnings also helped the index, with retailer Pan Pacific International Holdings jumping 8.1% and security firm Secom gaining 5.3%. Computer security firm Trend Micro rose 5.2%. Dai-ichi Life Holdings, a major insurer, gained 3.3% on a share buyback plan.
Some value-oriented shares, many of which are battling sinking demand due to the pandemic, gave into profit-taking after strong gains so far this month. Nippon Steel, which has risen more than 20% this month, fell 2.9%.
"Looking at various data, the prospects of a recovery in the global manufacturing sector are getting solid," said Takuya Hozumi, global investment strategist at Mitsubishi UFJ Morgan Stanley Securities. Investors also clung to hopes for more fiscal stimulus out of the United States despite a lack of any signs of progress in the talks between the White House and Democrats.
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