Tokyo's Nikkei 225 index on Monday posted the longest winning streak in its nearly 70-year history as markets cheered the weekend election victory of Japan's pro-business prime minister. The benchmark index rose 1.11 percent, or 239.01 points, to end the day at 21,696.65, its 15th consecutive rise and the longest since it came into existence in 1950.
The broader Topix index gained 0.84 percent, or 14.61 points, to finish at 1,745.25. The gains were driven by hopes that Shinzo Abe's growth blitz - a mixture of huge monetary easing, government spending and reforms to the economy - would continue. "It's symbolic" that the record winning streak came a day after Abe won the vote, Hikaru Sato, senior technical analyst at Daiwa Securities, told AFP.
Abe - who came into power in late 2012 on a ticket to reignite the lumbering economy - is now on course to become the country's longest-serving premier. "It's a relief for foreign investors who had bought Japanese stocks aggressively before the election on a bet that Abenomics will continue," said Masayuki Kubota, chief strategist at Rakuten Securities, referring to Abe's flagship economic policy. The growth blitz has been credited with weakening the yen and stoking the stock market although its impact on the broader economy is less clear.
"Any winning streak will come to an end and this is no exception, but the current buying momentum is likely to remain strong for now," said Toshikazu Horiuchi, a broker at IwaiCosmo Securities. On Monday the dollar strengthened to 113.73 yen against 113.51 yen in New York Friday. A cheaper yen is positive for Japanese exporters as it boosts their profitability, spurring demand for their shares.
"Abe's policies should remain accommodative and point to a weaker yen over time," said Stephen Innes, who heads Asia-Pacific trading at forex firm OANDA. The Nikkei was below 10,000 when Abe came to power in late 2012. But it still remains far below a record close of almost 39,000 in the last days of 1989, before the country's stock and property market bubble collapsed. The index then began a long descent as the once red-hot Japanese economy suffered years of malaise.
On Monday the weak yen boosted automakers, with Nissan up 1.66 percent at 1,097 yen and Honda rising 1.25 percent to 3,471 yen. Panasonic rose 1.77 percent to 1,666 yen and Canon climbed 0.94 percent to end at 4,068 yen. Major bank Mitsubishi UFJ Financial jumped 1.60 percent to 739.5 yen.
Comments
Comments are closed.