Nikkei Japan Stock Index Opens at Highest Level Since July 1990

Antaranews

Tokyo, Tangerangtalk - The benchmark Nikkei 225 index on the Tokyo Stock Exchange opened higher on Monday morning, reaching its highest level since July 1990. This surge is supported by optimism over the US debt ceiling deal and a weaker yen.

Japanese chip-related companies continue to outperform following the AI (Artificial Intelligence) frenzy that boosted their Wall Street counterparts.

The Nikkei soared as high as 31,560.43 points in the first 10 minutes of trading, although the gains moderated during the session, with the index holding a 1.7% increase at 31,427.38 points.

US President Joe Biden announced on Sunday (28/5/2023) that he had reached a budget agreement with House Speaker Kevin McCarthy, and the deal is ready to be brought to Congress for a vote. However, the agreement faced criticism from hardline Republicans and progressive Democrats.

"The deal is not finalized, so there is still a level of risk, but the basic agreement has reduced the risk, and both parties have committed to avoiding a technical default," said Maki Sawada, a strategist at Nomura Securities.

"The Nikkei surpassed the psychological level of 31,500 today, but ultimately, that level proved to be too heavy," she added. "This week, I expect the Nikkei to continue rising but with short-term retracement to control its pace."

The broader Topix index reached as high as 2,175.13 points but failed to approach last week's 33-year high of 2,188.66 points. It closed up 1.1% at 2,169.66 points.

The higher weight of exporters in the Nikkei contributed to larger gains as the yen weakened to 141 per dollar for the first time in six months. The weaker currency supported the value of foreign earnings.

Honda Motor rose 2.5%, while Nissan gained 1.5%.

The best-performing stock in the Nikkei was Advantest, a chip testing equipment maker that includes Nvidia Corp among its clients. Advantest shares surged as much as 6.9% to a record high and poised to extend their three-day rally if the gains hold.

Out of the 225 component stocks of the Nikkei, 191 rose, while 31 declined, and three remained unchanged.

Sumber: Antaranews