TOKYO: Japan’s Nikkei share average rose more than 1% on Monday, hitting 39,000 points for the first time in a month as a record closing high on Wall Street continued to fuel positive investor sentiment.

The Nikkei was 1.44% higher at 39,346.92 by the midday break, climbing to the psychologically significant 39,000-point range for the first time since April 15.

The broader Topix was up 1.21% at 2778.89.

Higher prospects of US rate cuts this year after a milder inflation report last week buoyed global market sentiment and led several indexes on Wall Street to lock in weekly gains.

That in turn has provided Japanese equities with a tailwind. “Stock prices have been supported as rate cut expectations are being revived,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

The Nikkei fell nearly 5% last month in its largest monthly drop since December 2022, following the benchmark index’s rise to an all-time high of 41,087.75 earlier this year.

On the back of those expectations, the Dow Jones Industrial Average finished above the 40,000 mark for the first time on Friday, which may be giving the Nikkei support on Monday, Ichikawa said.

Nikkei lower on BOJ policy uncertainty

Buying was widespread, with 204 of the index’s 225 constituents advancing, with high-tech shares and index heavyweights helping the Nikkei to 559.54-point gains.

Uniqlo parent firm Fast Retailing was up 1.9%, adding about 77 points alone.

Among chip-related shares, Shin-Etsu Chemical Co, which manufactures chip silicon products among other things, jumped 5.24%, and chip-making equipment giant Tokyo Electron gained 1.2%.

Advantest, which counts Nvidia among its customers, was up 0.8% as investors looked ahead of US firm’s earnings results this week, which could provide fresh momentum for the artificial intelligence-centred stock rally.