Japan’s Nikkei Closes at Record High as Tech Heavyweights Surge (Update2)

Reuters

11:20 JST, March 1, 2024 (updated at 16:00 JST)

TOKYO, March 1 (Reuters) – Japan’s Nikkei share average soared to all-time peaks and closed 2% higher on Friday, as tech-related stocks tracked record-high closings among their U.S. peers after comments from Federal Reserve officials provided cues on the interest rate trajectory.

The Nikkei ended at a new closing high of 39,910.82, moving past a record intraday peak of 39,426.29 set earlier this week. The index closed the week higher with a 2% jump.

Nikkei rose as high as 39,990.23, just shy of reaching 40,000 for the first time, as it continues to climb to record peaks after last month breaching the lifetime high set during the December 1989 asset bubble.

The broader Topix finished 1.26% higher at 2709.42.

Traders’ sentiment was upbeat after the S&P 500 and Nasdaq closed at record highs overnight, supported by technology stocks linked to AI, while U.S. inflation data and comments from Fed officials fueled bets of an interest rate cut in June.

Japan’s chip-related shares, which have greatly contributed to the index’s 17% surge this year, also jumped.

Index heavyweight Tokyo Electron surged 4.1% to add about 151 index points to the Nikkei’s near 745-point rise.

Chip-testing equipment maker Advantest, which counts U.S. artificial intelligence firm Nvidia among its customers, gave an additional 56 points, gaining 3.02%.

Shares of AI-focused startup investor SoftBank Group were up 1.3%.

Among the Tokyo Stock Exchange’s 33 industry sectors, electric machinery rose 2.05%, making it the third-largest gainer, after miners, which were up 2.63%, and the oil and coal product sector, up 2.07%.

At the same time, the insurance sector advanced 1.94% after a number of non-life insurance companies announced the previous day that they will sell cross-shareholdings over the next few years.

That’s positive for the Japanese financial sector, as it allows the companies to increase shareholder returns, said Kenji Abe, analyst, Daiwa Securities.

The news comes amid expectations that companies will continue to boost returns through such unwindings and other measures, spurred by a reform request from the Tokyo Stock Exchange. This has also been a key driver of the Nikkei’s recent rise.