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TOKYO (Reuters) – Japan’s Nikkei share average closed higher in a widespread rally on Tuesday, supported by a softer yen and technology share gains, as an encouraging U.S. economic outlook continued to support risk appetite globally.
The Nikkei rose more than 2% during the session before finishing up 1.8% at 38,062.92, its highest closing level since Aug. 1.
The broader Topix rose 1.1% to 2,670.54.
Domestic tech stocks tracked their U.S. peers higher to help lift the overall benchmark index, as Wall Street continued to rebound from a steep sell-off seen two weeks ago.
“The theme these days were concerns over a recession in the United States are lessening,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.
“The fact that U.S. stocks are performing solidly now is having a relatively positive effect on Japanese shares.”
Recent U.S. data revived expectations of a soft landing for the world’s largest economy. Market players now await Federal Reserve Chair Jerome Powell’s remarks on Friday at the Jackson Hole Economic Symposium for hints on the Fed’s rate path.
AI-focused startup investor SoftBank Group gained 3.1%, while chip-related shares Tokyo Electron and Advantest, rallied 1.6% and 2.1%, respectively. TDK Corp was up 1.3%.
A pause in the yen’s climb on Tuesday reassured investors, although analysts said the stock market remains sensitive to moves in foreign exchange.
The Japanese currency was last hovering around 147.29 yen per dollar in a boost to Toyota Motor, up 1%, and other export-related shares.
Gains were widespread though, with 204 of the Nikkei’s 225 constituents rising against 20 decliners. One share was untraded.
Among individual shares, Uniqlo parent firm and Nikkei heavyweight Fast Retailing surged 3.6% to give the index the biggest lift.
Shares of Seven & I Holdings slumped over 10%, shedding some of Monday’s gains made on news of a takeover proposal from Canada’s Alimentation Couche-Tard.
