TOKYO: Tokyo’s benchmark Nikkei index closed more than 3.8 percent higher on Thursday, with investors heartened by Wall Street’s best performance in nine years.
The Nikkei 225 index soared 3.88 percent or 750.56 points to close at 20,077.62, while the broader Topix index was up 4.90 percent or 70.16 points at 1,501.63, reports AFP.The rallies came after the Nikkei index lost more than four percent this week amid rising doubts about the US economy and fears sparked by a US government funding crisis.
“Bargain-hunting was triggered by US rallies as investors bought on dips following the recent slump,” said Daiwa Securities senior technical analyst Hikaru Sato.
“But today’s rally does not mean that all the negative factors, including the US-China trade war and Brexit, have disappeared,” Sato told AFP.
“Sensitive and volatile trading is expected to continue for now,” he added. Exporter shares rose strongly as a weaker yen improved their business outlook.
The dollar was trading at 111.13 yen in Asian afternoon trade, down from 111.33 yen in New York but up from 110.45 yen when Tokyo closed on Wednesday.
Wall Street stocks roared back to life in post-Christmas trade on Wednesday, shaking off four straight routs following strong retail sales data and White House reassurances that Fed Chair Jerome Powell won’t be fired.The Dow Jones Industrial Average finished up nearly 1,100 points, or about five percent, with the broad-based S&P 500 also surging five percent.
The US gains were the biggest for a single session on Wall Street in nine years, a surge analysts attributed in part to technical factors after days of selling.
“It was possible that risk appetite wouldn’t recover until after the new year but thanks to the upturns in Tokyo and New York, we are likely to see the new year in with a somewhat brighter mood,” Mizuho Securities said in a note.
Many investors have been unnerved by a variety of factors, including the partial US government shutdown, the US-China trade war and US President Donald Trump’s ongoing criticism of Fed Chair Powell.
But a sense of relief won out for now.
Sentiment also improved after a Bloomberg News report said a US government delegation will travel to Beijing in early January to hold trade talks in the first face-to-face discussion since Trump and Chinese leader Xi Jinping agreed on a 90-day truce.