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10:43 JST, November 6, 2024 (updated at 12:30 JST)
TOKYO, Nov 6 (Reuters) – Japan’s Nikkei share average tracked Wall Street’s strong finish on Wednesday as market participants awaited indications of the outcome of a knife-edge U.S. presidential election.
The Nikkei was up 1.9% at 39,211.84, as of 0216 GMT, while the broader Topix gained 1.6% at 2,706.51.
U.S. stocks closed sharply higher in a broad rally on Tuesday after data signaled a solid economy, but investors braced for volatile trading this week as voting was underway in an extremely tight presidential election.
The Nikkei accelerated gains as the dollar strengthened against the yen. The dollar climbed 1% to ¥153.22 .
A weaker yen tends to boost Japanese exporters’ overseas earnings when repatriated.
“The market is looking ahead of the election outcome already, with the dollar gaining and Japanese stocks rising,” said Yugo Tsuboi, chief strategist at Daiwa Securities.
Risk money started flowing into global equities after strong U.S. economic data, said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
“That lifted Japanese stocks. Whoever becomes the U.S. President, the U.S. economy looks to remain solid and that’s a follow wind for U.S. equities.”
The Institute for Supply Management said its non-manufacturing purchasing managers index, a gauge of the services sector, accelerated to 56.0 last month, its highest since August 2022.
In Japan, technology stocks led the gains, with chip-testing equipment maker Advantest jumping 6.3% to become the biggest boost to the Nikkei.
Toyota Motor slipped 0.68% ahead of its earnings announcement later in the day.
“Toyota’s outlook will be a gauge for the market to confirm fundamentals of local firms, which we need to see for further gains of the Nikkei” said Kamada.
Shares of Nintendo jumped 4.3% even as the gaming company cut its operating profit forecast for the year to March 2025 by 10%.
