Japan's Nikkei hits 1990 high on weak yen, US optimism; SoftBank surges
Reuters
Published May 28, 2023 08:17PM ET
Updated May 29, 2023 02:30AM ET
By Kevin Buckland
TOKYO (Reuters) - Japan's Nikkei share average rose on Monday to its highest level since July 1990, buoyed by optimism over a U.S. debt ceiling deal and a weaker yen.
SoftBank Group jumped more than 8% as shares of Japanese chip-related companies continued to outperform amid the AI euphoria that also propelled Wall Street peers.
The Nikkei surged as high as 31,560.43 within the first 10 minutes of trading, although gains were capped over the course of the day as the index closed up 1.03% at 31,233.54.
SoftBank Group continued to push higher throughout the day, driven by news that British subsidiary Arm Ltd had rolled out a new chip technology that Taiwan smartphone-chip maker MediaTek will adopt in next-generation products.
Advantest, the chip-testing equipment maker that counts Nvidia (NASDAQ:NVDA) Corp among its clients, climbed more than 4%, taking gains over the past three sessions to nearly 26%.
"The trigger for everything was Nvidia," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui (NYSE:SMFG) DS Asset Management.
The Nikkei is easily swayed by moves in the big tech stocks, relative to the Topix, and that sets the index up to outperform, he added.
The broader Topix rose as much as 1.36% to 2,175.13 in early trading but failed to get close to last week's 33-year high at 2,188.66. It finished the day up 0.69% at 2,160.65.
Lifting the mood across the Japanese market early on, U.S. President Joe Biden said on Sunday he had finalized a budget agreement with House Speaker Kevin McCarthy and the deal was ready to move to Congress for a vote.
Meanwhile, the yen dropped to the cusp of 141 per dollar for the first time in six months, buoying the value of overseas revenue for Japanese exporters.
Honda Motor rallied 1.28% and Subaru (OTC:FUJHY) advanced 1.67%.
Of the Nikkei's 225 components, 165 rose, while 51 fell and nine were flat.
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Written By: Reuters
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