The Nikkei 225 average shot up Tuesday to rewrite its highest closing level in more than two years, with investors taking heart from an advance on Wall Street brought on by stronger than expected U.S. economic reports.
The Nikkei rose 213.29 points, or 1.05 percent, to close at 20,614.07, the highest closing level since Aug. 17, 2015. On Monday, the key market gauge climbed 44.50 points.
The Topix, which covers all first-section issues, ended 10.84 points, or 0.65 percent, higher at 1,684.46 after shedding 1.13 points the previous day.
Tokyo stocks were firmer after U.S. equities extended gains Monday, inspired in particular by the U.S. Institute for Supply Management’s manufacturing activity index for September, which surged to a 13-year high of 60.8, brokers said.
All three major U.S. stock indexes — the Dow Jones industrial average, the S&P 500 index and the tech-heavy Nasdaq composite index — hit closing highs.
The Tokyo Stock Exchange gathered steam further after the dollar climbed above ¥113, brokers said.
“The ISM index contributed significantly to the rise in Tokyo stocks, while the firmness of Japan’s real economy, shown in the (Bank of Japan’s) tankan survey, was also a factor,” said Hiroaki Hiwada, strategist at Toyo Securities Co.
In the BOJ’s tankan quarterly business sentiment survey for September, released on Monday, the headline index showing business sentiment among large manufacturers in Japan hit a 10-year high.
The rise of Tokyo stocks in early trading can be attributed to purchases by foreign investors, Hiwada said, as the “buying pattern is not typical of domestic players.”
The mass shooting incident in Las Vegas and the independence vote in Spain’s Catalonia “apparently did not have much impact on U.S. and Japanese stock prices, while they affected the bond and currency markets,” said an official of a bank-affiliated brokerage firm.
The Oct. 22 Lower House election and Japanese corporate earnings slated to come out this month will be closely watched as potentially market-moving factors, Hiwada said.
Rising issues outnumbered falling ones 1,172 to 759 in the first section, while 99 issues were unchanged.
Volume rose to 1.450 billion shares from Monday’s 1.355 billion.
Realtors, including Mitsui Fudosan, Sumitomo Realty, Mitsubishi Estate and Heiwa Real Estate, were upbeat due to buying on dips, after remaining relatively sluggish compared with the recent uptrend of the overall market.
Asatsu-DK attracted purchases after U.S. investment fund Bain Capital said Monday it will acquire the third-largest ad agency in Japan through a tender offer.
Railway operator JR East was buoyant on expectations for brisk earnings backed by rising demand for leisure and traveling.
By contrast, oil companies Japex, Inpex and Cosmo Energy met with selling on the back of lower crude oil prices.