Tokyo’s Nikkei 225 yesterday posted the longest winning streak in its nearly 70-year history as markets cheered the weekend election victory of Japan’s pro-business prime minister.
The benchmark index rose 1.11 percent, or 239.01 points, to end the day at 21,696.65, its 15th consecutive rise and the longest since it came into existence in 1950.
The broader TOPIX gained 0.84 percent, or 14.61 points, to finish at 1,745.25.
The gains were driven by hopes that Japanese Prime Minister Shinzo Abe’s growth blitz — a mixture of huge monetary easing, government spending and reforms to the economy — would continue.
“It’s symbolic” that the record winning streak came a day after Abe won the vote, Daiwa Securities Group Inc senior technical analyst Hikaru Sato told reporters.
Abe — who came into power in late 2012 on a ticket to reignite the lumbering economy — is now on course to become the country’s longest-serving prime minister.
“It’s a relief for foreign investors who had bought Japanese stocks aggressively before the election on a bet that ‘Abenomics’ will continue,” Rakuten Securities Inc chief strategist Masayuki Kubota said, referring to Abe’s flagship economic policy.
The growth blitz has been credited with weakening the yen and stoking the stock market, although its effects on the broader economy is less clear.
“Any winning streak will come to an end and this is no exception, but the current buying momentum is likely to remain strong for now,” Iwai Cosmo Securities Co broker Toshikazu Horiuchi said.
The US dollar yesterday strengthened to ¥113.73 against ¥113.51 in New York on Friday.
A cheaper yen is positive for Japanese exporters as it boosts their profitability, spurring demand for their shares.
“Abe’s policies should remain accommodative and point to a weaker yen over time,” said Stephen Innes, who heads Asia-Pacific trading at foreign-exchange firm Oanda Corp.
The Nikkei was below 10,000 when Abe came to power in late 2012. However, it still remains far below a record close of almost 39,000 in the last days of 1989, before the country’s stock and property market bubble collapsed.
The index then began a long descent as the once red-hot Japanese economy suffered years of malaise.
Yesterday the weak yen boosted automakers, with Nissan Motor Co up 1.66 percent at ¥1,097 and Honda Motor Co rising 1.25 percent to ¥3,471.
Panasonic Corp rose 1.77 percent to ¥1,666 and Canon Inc climbed 0.94 percent to end at ¥4,068.
Major bank Mitsubishi UFJ Financial Group Inc jumped 1.60 percent to ¥739.5.
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