Japan's Nikkei ends at 6-month high, tracking Wall Street rally

Japan’s Nikkei share average closed at a six-month high on Friday (Jun 27), as technology stocks tracked Wall Street’s robust finish overnight.

The Nikkei jumped 1.43 per cent to 40,150.79, its highest closing level since Dec 27. The index rose 4.6 per cent for the week, its sharpest weekly gain since the week of Sep 23, 2024.

The broader Topix rose 1.28 per cent to 2,840.54, gaining 2.5 per cent for the week.

“Investors finally became willing to make long positions on US stocks, underpinned by positive news around easing tensions in the Middle East and expectations for the interest rate cut,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

“Japanese equities mirrored the US trend, led by stocks which are popular among foreign investors.”

Overnight, Wall Street finished higher, with the S&P 500 and the Nasdaq just shy of record closing highs as the Israel-Iran ceasefire continued to hold and a raft of economic indicators appeared to support the case for the Federal Reserve lowering borrowing costs this year.

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In Japan, technology stocks rose, with chip-making equipment maker Tokyo Electron jumping 4.3 per cent to boost the Nikkei the most. Tech start-up investor SoftBank Group rose 2.54 per cent.

Defence-related stocks Kawasaki Heavy Industries and Mitsubishi Heavy Industries rose 6.15 per cent and 2.71 per cent, respectively, on expectations of increased defence spending in Japan.

Bucking the trend, chip-testing equipment maker Advantest lost 1.07 per cent, weighing the most on the index, as investors booked profits from its more than 40 per cent rise this month.

“Still, the rally on overall IT-related shares will continue. The market is just relocating their targets,” Ikeda said.

Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 72 per cent rose, 24 per cent fell and 2 per cent traded flat. REUTERS