TOKYO: Japan’s Nikkei share average climbed to a three-week high on Tuesday as markets resumed trade after a long holiday weekend, with Wall Street’s overnight gains and the Bank of Japan’s dovish comments last week lifting investor sentiment.
The Nikkei was up 0.8% at 38,033.16, as of 0217 GMT, after rising as much as 1.9% earlier to 38,427.15, its highest since Sept. 3. Japanese markets were closed on Monday for a holiday.
U.S. stocks closed modestly higher on Monday as investors assessed whether a trend would develop in the week following the Federal Reserve’s rate cut.
The BOJ kept interest rates steady on Friday and its governor said the central bank could afford to spend time eyeing the fallout from global economic uncertainties, signalling it was in no rush to raise borrowing costs further.
“Expectations that the U.S. economy will make a soft landing have risen after the Fed’s 50 basis-point rate cut,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Research Institute.
Japan’s Nikkei books best week since mid-Aug
“And, BOJ Governor (Kazuo) Ueda sounded more dovish on Friday than his remarks after the previous policy meeting, which was positive for the stock market.”
Uniqlo-brand owner Fast Retailing rose 1.09% and was the biggest boost to the Nikkei.
Electronic component maker TDK jumped 4.4% and technology start-up investor SoftBank Group gained 1.65%.
Chip-testing equipment maker Advantest edged higher 0.6%, while chip-making equipment maker Tokyo Electron erased early gains to fall 0.93%.
The broader Topix was up 0.63% at 2,659.02, with conglomerate Hitachi jumping 5% to become the biggest boost.
Shingo Ide, chief equity strategist at NLI Research Institute, said the market rose because investors bought back stocks to cover short positions made before the Fed’s rate-cut decision last week.
Of the 225 Nikkei components, 143 stocks rose, 79 fell and three traded flat.
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