TOKYO (Kyodo) – Tokyo stocks extended their winning streak to four days on Tuesday, with the Nikkei ending at a seven-week high as sentiment lifted by the yen’s weakening against the US dollar, although gains were limited as some investors locked on profits.
The Nikkei Stock Average with 225 issues closed on Monday at 31.32 points, or 0.11 percent, at 29,808.12, its highest closing price since September 28. The broader Topix index of all issues in the first segment on the Tokyo Stock Exchange finished 2.31 points, or 0.11 percent, up at 2,050.83.
The winners were led by mining, transportation equipment, and insurance issues.
The dollar remained strong in the lower 114 yen range in Tokyo amid speculation that a surge in US Treasury bond yields would widen the interest rate differential between the United States and Japan, traders said.
At 5:00 p.m. the dollar hit 114.26-28 yen, compared to 114.08-18 yen in New York and 113.94-95 yen in Tokyo at 5:00 p.m. on Monday.
The euro was trading at $ 1.1379-1381 and 130.02-06 yen late Monday afternoon versus $ 1.1361-1371 and 129.67-77 yen in New York and $ 1.1449-1451 and 130.45-49 Yen in Tokyo.
The 10-year Japanese benchmark bond yield rose 0.005 percentage points from just under 0.070 percent on Monday, reflecting a surge in US Treasury bond yields the previous day as investors sold the safe bonds after Tokyo stocks rose. Bond yields move in the opposite direction to prices.
The Nikkei index initially tracked overnight declines on Wall Street, but it fluctuated mostly during the day around the previous day’s close as its downward move was aided by buying export-related issues aided by yen weakness, brokers said.
The benchmark was weighed down by investors who took profits as it neared the 30,000 mark, brokers said.
“Equities were top heavy in the absence of new trading leads, although the US-China meeting provided some market support,” said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.
U.S. President Joe Biden and his Chinese counterpart Xi Jinping held online talks on Monday for the first time since taking office in January to address the increasing rivalry between their countries on issues ranging from trade to human rights to Taiwan.
While there weren’t any prominent developments, investors viewed the interaction as positive as they had largely focused on whether the talks would be friendly, Yamaguchi added.
In the first section, the number of declining issues was higher than that of the advanced between 1,189 and 890, while 104 ended unchanged.
Mitsubishi UFJ Financial Group rose 3.2 yen, or 0.5 percent, to 648.4 yen after revising its earnings forecast for the fiscal year through March up from its previous estimate in May on Monday.
On the export-oriented themes, automaker Toyota Motor rose 39.5 yen, or 1.9 percent, to 2,141.5 yen and Isuzu Motors rose 21 yen, or 1.3 percent, to 1,648 yen, while electronics maker Hitachi rose 93 yen, or 1.3 percent to 7,365 yen.
Trading volume on the main section increased from 1,163.41 million shares on Monday to 1,190.59 million shares.