Global Courant 2023-05-29 10:34:27
Japan’s stock market rises to its highest level since July 1990 after the US struck a deal to raise the debt ceiling.
Japan’s Nikkei stock average rose to its highest level since July 1990, supported by optimism about a US debt ceiling deal and a weaker yen.
Shares of Japanese chip-related companies continued to outperform as AI euphoria sent Wall Street peers soaring.
The Nikkei rose to 31,560.43 in the first 10 minutes of trading on Monday, though gains were flattened as the index entered the noon break up 1.32 percent at 31,325.84, close to the low of the session.
US President Joe Biden said on Sunday that he had struck a budget deal with Speaker of the House Kevin McCarthy and that the deal was ready to go to Congress for a vote. However, the deal has drawn fire from hardline Republicans and progressive Democrats.
“The deal is not done yet, so there is still some risk, but the base deal has reduced the risks and both parties have committed to avoid technical bankruptcy,” said Maki Sawada, a strategist at Nomura Securities.
“The Nikkei passed the psychological mark of 31,500 on Monday, but in the end that level turned out to be a bit too heavy,” she said. “This week, I expect the Nikkei to move steadily forward, but with short-term retracements to control speed.”
The broader Topix rose to 2,175.13, but fell short of last week’s 33-year high of 2,188.66. It entered the break with an increase of 0.96 percent at 2,166.41.
The increased weighting of the Nikkei relative to export stocks led it to higher gains for the first time in six months as the yen fell to the 141 per dollar mark. A weaker currency boosts the value of foreign earnings.
Honda Motor gained 1.86 percent and Subaru rose 1.78 percent.
The joint topper of the Nikkei was Advantest, the manufacturer of chip testing equipment that counts Nvidia Corp. NVDA.O among its customers.
Advantest shares rose to a record high of 6.9 percent, though they started the break up 4.18 percent, tied with Nikon and startup investor SoftBank Group.
Of the Nikkei’s 225 components, 193 were up, 27 were down and five were flat.
