Japan’s Nikkei ends at record high as automakers rise on weaker yen

Japan’s Nikkei share average extended its gains from last week to end at a record high on Monday (Aug 18), as a weaker yen pushed automakers’ stocks higher.

The Nikkei rose 0.77 per cent to 43,714.31 and the broader Topix rose 0.43 per cent to 3,120.96. Both closed at record levels for the second straight session.

Japanese shares rallied this month on renewed optimism over the domestic corporate outlook and economic growth as the impact of US tariffs became clearer.

“Domestic equities kept the momentum from last week. There was an expectation that foreign investors would continue buying Japanese stocks,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

Fast Retailing gained 1.28 per cent to lend the biggest boost to the Nikkei. Chip-testing equipment maker Advantest reversed early losses to end 1.48 per cent higher.

Automakers rose, with Toyota Motor and Honda Motor rising 1.72 per cent and 1.56 per cent, respectively, as the yen lost about 0.2 per cent against the US dollar on Monday.

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A weaker Japanese currency tends to boost exporters’ shares as it increases the value of overseas profits in yen terms when repatriated to Japan.

Meanwhile, Japanese shares were also underpinned by the Dow Jones hitting an intraday record high on Friday, as UnitedHealth’s shares jumped after Berkshire Hathaway raised its stake.

Back in Tokyo, banks fell, sending the banking index 1.93 per cent lower and making it the biggest loser among the Tokyo Stock Exchange’s (TSE) industry sub-indexes.

Mitsubishi UFJ Financial Group lost 2.55 per cent and Sumitomo Mitsui Financial Group shed 2.3 per cent.

Banks had risen on Friday after a surprisingly strong economic data drove expectations for the Bank of Japan’s interest rate hike.

Chip-making equipment maker Tokyo Electron lost 2.14 per cent to weigh the most on the Nikkei. Sony Group fell 2.54 per cent.

Of more than 1,600 stocks trading on the TSE’s prime market, 69 per cent rose, 27 per cent fell and 2 per cent traded flat. REUTERS