Nikkei 225 Stock Average Rises to Highest Close Since 1992By
Japanese stocks rallied, with the Nikkei 225 Stock Average reaching its highest close since January 1992, bolstered by strong corporate earnings and the yen’s weakness against the dollar.
The Topix index rose to close at the highest since February 2007. Electronics and machinery makers were among the biggest contributors to the benchmark’s advance after the yen weakened for the first time in four days against the dollar. Oil-related shares, including Japan Petroleum Exploration Co. and Inpex Corp., rose the most among sub-indexes after a crackdown on corruption in Saudi Arabia sent oil soaring to its highest price in more than two years.
Of the more than 1,100 companies included in the Topix that have reported earnings for the current season, 63 percent have posted year-on-year growth in earnings per share, at an average of 16 percent.
“The biggest reason behind Japanese stocks’ rally has been strong earnings results,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “There’s no cloud on the horizon of the global economy, and more investors are seeing that good earnings will continue through the coming quarters.”
The Topix and the Nikkei 225 have gained about 20 percent this year, boosted by the prospects for higher corporate earnings and the continuity of Prime Minister Shinzo Abe’s economic policies after his landslide election victory last month.
“The Nikkei 225 breaching the milestone is significant,” said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Institute. “It could be a signal for an end of deflation in Japan.”
- Topix +1.2% to 1,813.29 at close in Tokyo
- Nikkei 225 +1.7% to 22,937.60 at close
- Yen -0.3% at 114.01 per dollar after strengthening 0.3% Monday
- Japan Steel Works +18% to highest since May 2013; soars on earnings beat, raised targets
- Miura +8.3% to a record; first-half operating profit rose 16% y/y to 6.7b yen, beating company forecast by 26%
- Keihin Corp. +8.8% to highest since July 2007; 1H results and FY forecast beat analyst estimates
— With assistance by Emi Urabe