TOKYO: Japan’s Nikkei share average extended their gains from last week to hit a record high on Monday (Aug 18), tracking the Dow Jones’s higher finish last week, as a weaker yen boosted automakers’ stocks.
The Nikkei rose 0.7 per cent to 43,683.56 as of 0137 GMT (9.30am, Singapore time). The broader Topix also scaled a record peak, gaining 0.58 per cent to 3,125.6.
Japanese shares rallied this month on renewed optimism over the domestic corporate outlook as the impact of US tariffs became clearer.
“Domestic equities kept the momentum from last week. There was an expectation that foreign investors would continue buying Japanese stocks,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
Fast Retailing gained 1.2 per cent to lend the biggest boost to the Nikkei.
Automakers rose, with Toyota Motor and Honda Motor rising 1.58 per cent and 1.22 per cent, respectively, as the yen lost 0.2 per cent against the US dollar on Monday.
A weaker Japanese currency tends to boost exporters’ shares as it increases the value of overseas profits in yen terms when repatriated to Japan.
Meanwhile, Japanese shares were also underpinned by the Dow Jones hitting an intraday record high on Friday, as UnitedHealth’s shares jumped after Berkshire Hathaway raised its stake.
Back in Tokyo, banks fell, sending the banking index 1.45 per cent lower and making it the biggest loser among the Tokyo Stock Exchange’s industry sub-indexes.
Mitsubishi UFJ Financial Group lost 1.96 per cent and Sumitomo Mitsui Financial Group shed 1.78 per cent.
Banks had risen on Friday after a surprisingly strong economic data drove expectations for the Bank of Japan’s interest rate hike.
Chip-related heavyweights weighed on the Nikkei, with Tokyo Electron and Advantest falling 1.3 per cent and 0.09 per cent, respectively.
