Tokyo stocks see strong start on back of US rally

TOKYO – Tokyo stocks opened higher today after Wall Street shares rallied to another record finish on optimism for further United States recovery.

The benchmark Nikkei 225 index rose 0.31%, or 94.75 points, to 30,184.00 in early trade. The broader Topix index gained 0.04%, or 0.78 points, to 1,984.32.

The strong start for Tokyo bourses comes after the US market reopened following a long weekend, giving investors a chance to react to the robust US March jobs data issued last Friday.

Separately, fresh data showed activity in the US services sector hitting an all-time high last month on sustained hopes that the economy will gradually reopen as Covid-19 vaccination continues.

But, the Tokyo market showed signs of overheating after recent gains, discouraging investors from making aggressive bets for now.

Overnight, the Dow Jones Industrial Average jumped 1.1% to 33,527.19, an all-time high.

The broad-based S&P 500 also marked a fresh record close after rising 1.4%, while the tech-rich Nasdaq Composite Index surged 1.7%.

Investors picked up shares of firms that showed room for further business growth, while also cheering falling US yields, said Okasan Online Securities in a note.

“Tokyo shares are testing higher prices as sentiment brightened after the US rallies.”

But, the data indicated that the market is starting to overheat.

“After the initial round of early buying, the market is likely to stay in a range,” said Okasan.

Shortly before the Tokyo market opened, the government said Japan’s household spending for February fell 6.6% from a year ago.

It is the third straight monthly decline, as the government imposed emergency measures to contain coronavirus infections in major economic hubs such as the greater Tokyo area.

Among major Tokyo shares, Toyota lost earlier gains and moved 0.24% lower to ¥8,441 (RM316.67). Uniqlo operator Fast Retailing was down 0.06% at ¥92,540.

SoftBank Group fell 0.85% to ¥9,908. Sony Group also remained under water, down 0.97% to ¥12,210.

Mitsubishi UFJ Financial Group fell 2.00% to ¥598.4.

IT firm Fujitsu added 1.01% to ¥16,550. Industrial robot maker Fanuc gained 0.47% to ¥28,010. – AFP, April 6, 2021