Japan’s Nikkei marks a closing high on improving corporate profit outlook

[TOKYO] Japan’s Nikkei share average marked a record closing high on Tuesday (Jan 6) as the outlook for domestic company’s profits improved.

The Nikkei rose 1.32 per cent to close at 52,518,08. The index rose 4 per cent in the first two sessions of the year, taking a cue from Wall Street’s strength.

The broader Topix also closed at a record high, rising 1.75 per cent to 3,538.44.

“The fundamental setting for Japanese equities is strong, so that when the market sees positive cues, the appetite grows,” said Kazunori Tatebe, chief strategist at Daiwa Asset Management.

“These fundamentals are based on the shift from deflation to inflation and corporate governance reform. And domestic investors have become more willing to buy Japanese stocks,” he said.

Wall Street ended higher overnight, with surging financial shares helping lift the Dow Jones Industrial Average to an all-time peak. At the same time, energy firms jumped after a US military strike captured Venezuelan President Nicolas Maduro.

In Japan, refiner Eneos Holdings jumped 5.39 per cent, leading the gain in the Topix’s oil and coal products index, which jumped 4.7 per cent to become the top performer among the Tokyo Stock Exchange’s (TSE) 33 industry sub-indexes.

The bank share index climbed 3.35 per cent, with Mizuho Financial Group jumping 5 per cent. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rose nearly 3 per cent each.

Bucking the trend, Chubu Electric Power tanked 9.59 per cent to become the worst percentage loser on the Nikkei after the Japanese utility disclosed possible problems with earthquake standards used at a nuclear plant.

Of the more than 1,600 stocks on the TSE’s prime market, 84 per cent rose, 13 per cent fell, and 2 per cent traded flat. REUTERS