Japan’s Nikkei Stock Average Ends at over 11-Month High as US Stocks Rally Boosts Risk Appetite (UPDATE 1)

Reuters

12:08 JST, June 30, 2025 (updated at 16:15 JST)

TOKYO, June 30 (Reuters) – Japan’s Nikkei share average closed at a more than 11-month high on Monday as investor risk appetite grew after a strong rally in U.S. equities, driven by hopes for trade talks and Federal Reserve’s rate cuts.

The Nikkei rose 0.84% to close at 40,487.39, its highest closing level since July 17. The index narrowed its earlier gains as investors booked profits from the sharp gains of the index, which rose for a fifth straight session.

The broader Topix climbed 0.43% to 2,852.84.

A strategist at a domestic brokerage said a rally of U.S. equities last week and hopes of Fed rate cuts, as well as easing tension in the Middle East, helped investors to turn “risk-on.”

“There are still uncertainties surrounding U.S. tariff policy and geopolitical risks as well as the policy of central banks,” said Takeo Kamai, head of execution services at CLSA in Tokyo.

“But that has become a new normal. The Nikkei is strong enough to head towards the next milestone of around the 42,000 level,” he said.

Wall Street extended its rally on Friday, sending the S&P 500 and Nasdaq to all-time closing highs as trade deal hopes fueled investor risk appetite and economic data helped solidify expectations for rate cuts from the U.S. Federal Reserve.

In Japan, start-up investor SoftBank Group jumped 4.32% to become the biggest source for the Nikkei’s gains.

Chip-making equipment maker Tokyo Electron and chip-testing equipment maker Advantest rose 0.6% each.

Automakers fell after U.S. President Donald Trump said in an interview broadcast on Sunday that Japan engages in “unfair” automobile trade with the U.S.

Toyota Motor and Honda Motor lost 1.35% and 1.86%, respectively.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 54% rose and 40% fell, and 4% traded flat.