Stocks gained further ground on the Tokyo Stock Exchange on Thursday as investors stepped up buybacks following the a weakening of the yen against the dollar and overnight gains on Wall Street.
The 225-issue Nikkei average climbed 139.70 points, or 0.72 percent, to close at 19,646.24. On Wednesday, the key market gauge rose 143.99 points.
The Topix index of all first-section issues finished up 9.76 points, or 0.61 percent, at 1,617.41, after gaining 9.89 points the previous day.
Tokyo stocks attracted purchases as the yen fell and U.S. equities rose on positive U.S. economic readings released Wednesday after the Tokyo market closed, brokers said.
Revised gross domestic product data for April-June and Automatic Data Processing Inc.’s private-sector jobs data for August both turned out better than expected.
On the back of the robust U.S. economic data, investors actively bought stocks, including export-oriented issues, throughout Thursday’s session, brokers said.
The Tokyo market was a “textbook case” of rising prices Thursday, Yoshihiko Tabei, chief analyst at Naito Securities Co., said, attributing the market’s firmness to the yen’s drop rather than the rise in U.S. equities.
As the U.S. economic recovery conveyed by GDP and jobs data ignited fears of an additional interest rate hike by the U.S. Federal Reserve this year, the Dow Jones industrial average “only inched up,” which is unlikely to have affected Tokyo stocks in any significant way, Tabei said.
“Buying may have run its course” in the Tokyo market, Tabei said, indicating the possibility that investors will be inactive on Friday and next week.
“The improvement in the U.S. economy has already been discounted” in the market since Wednesday’s economic indicators, he said, adding that investors may not move even if the U.S. government’s jobs data, to be released Friday, is positive.
On the other hand, an official at a bank-affiliated securities company suggested that the U.S. personal consumption expenditures deflator for July, which will come out later Thursday, may stimulate buying of Tokyo stocks as it “may move the U.S. government bond market and prompt a further easing of the yen.”
Rising issues outnumbered falling ones 1,198 to 723 in the TSE’s first section, while 102 issues were unchanged.
Volume rose to 1.77 billion shares from Wednesday’s 1.71 billion shares.
Financial issues, including mega-bank groups Mitsubishi UFJ and Sumitomo Mitsui and insurers Dai-ichi Life and T&D, were buoyant on expectations for a Fed interest rate hike.
Fujifilm gained ground after it announced a midterm business plan to fiscal 2019 and a share buyback program.
By contrast, oil companies including Japex, JXTG and Idemitsu were downbeat due to confusion in the crude oil market, after Hurricane Harvey hit refineries in the United States.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 170 points to end at 19,690.