Japan’s Nikkei Rises to Record High as Financials and Heavyweights Climb (UPDATE 1)

Reuters

13:18 JST, July 10, 2024 (updated at 16:05 JST)

TOKYO (Reuters) – Japan’s Nikkei share average rose to an intraday peak in a choppy session on Wednesday as financial shares outperformed and investors snapped up stocks to get in on the latest rally.

After staying in negative territory for much of the afternoon session, buying broadened toward the end of trading to spur the Nikkei to a record high of 41,889.16 points.

The benchmark index closed up 0.61% at an all-time closing high of 41,831.99, while the broader Topix finished 0.47% higher at a record closing peak of 2909.20.

Big-name stocks gained to give the Nikkei a lift, with Uniqlo parent firm Fast Retailing up 1.4% and AI-focused startup investor SoftBank Group climbing 0.8%.

Technology and semiconductor shares, which saw a selloff in early trading after rallying on Tuesday, narrowed their losses or flipped into positive territory. Chip-making equipment giant Tokyo Electron reversed morning losses to end up 1.1%.

“For now, the technicals are highly constructive with investors buying the break-out,” said Kyle Rodda, senior financial market analyst at Capital.com.

Japan’s main stock indexes have marched to all-time highs over the last two weeks, and analysts say company earnings due in the latter half of July could drive Japanese equities higher.

Risks remain, however, that global bond yields will move higher amid political uncertainty, Rodda added. Higher yields offer investors less risk while also making borrowing to fuel growth more expensive.

Financials led gains by sectors as the Bank of Japan met with bond market participants for a second time this week, and data showed the country’s wholesale inflation accelerated in June, bringing policy normalization back into focus.

Insurance firms jumped 3.5%, while securities rose 1.3% and banks.T were up 1.3%.

Among individual shares, Recruit Holdings rose 3.6% after the staffing agency announced plans to buy back shares.

Kokusai Electric6525.T slid 7.2% a day after Reuters reported private equity firm KKR planned to cut its stake in the chip equipment manufacturer.