Reuters

Japan’s Nikkei Closes above 38,000 Points as Tech Shares Soar (Update 1)

Yomiuri Shimbun file photo
Tokyo Stock Exchange

Reuters

13:23 JST, April 24, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average locked in a third consecutive day of gains on Wednesday, tracking Wall Street higher to break above 38,000 points as investors continued to snap up tech-related shares.

The Nikkei finished up 2.4% at 38,460.08, retaining the 38,000-point range into the close for the first time in just over a week.

The broader Topix closed 1.7% higher at 2710.73.

Japanese shares have had a bumpy month since the benchmark index rose to a record high of 41,087.75 at the end of March. It sank as low as 36,733.06 last week on factors such as geopolitical concerns and profit-taking.

However, sentiment has turned favorable on risk assets again as fears of a re-escalation in the Middle East eased and U.S. stocks closed higher overnight following positive earnings from top-tier companies, giving the Nikkei a boost.

“Japanese stocks are currently enjoying the bid from Wall Street as well as the weak yen,” said Charu Chanana, head of currency strategy and global market strategist at Saxo.

A weaker yen tends to boost Japanese export shares, as it raises the value of overseas profits in yen terms when firms repatriate them to Japan.

Toyota Motor , which rose 3.1%, and other export-related stocks performed strongly as the dollar traded around a 34-year high against the Japanese currency.

Chip-related shares saw some of the largest gains, with Tokyo Electron jumping 7.1% and Advantest up 3.6%. Renesas Electronics climbed 10.5% to become the day’s biggest winner.

Risks lie ahead though, as the earnings season heats up in the United States, Chanana said.

Although the Nikkei “has room to hold despite risks of an intervention, the bid in U.S. equities is highly vulnerable to the big tech companies reporting earnings this week,” Chanana added.

In individual stocks, Nikon surged 10.3%, its biggest daily gain in 11 years, after an official filing showed investment management company Silchester holds a 5.02% stake in the camera maker.