Nikkei returns to 21,000 mark as Japan virus emergency is lifted
Tokyo stocks soared on Tuesday, with the benchmark Nikkei index topping the 21,000 mark for the first time in almost three months, on hopes for a revival of economic activity one day after Japan ended a countrywide state of emergency aimed at curbing the spread of the coronavirus pandemic.
The 225-issue Nikkei benchmark ended up 2.55 per cent, or 529.52 points, at 21,271.17, while the broader Topix index was up 2.17 per cent, or 32.53 points, at 1,534.73 at the market close.
Nearly all industrial categories have advanced. Air and land transportation has been among the leading gainers on expectations that people will start to travel again. Issues related to real estate also grew significantly.
In the currency market, the U.S. dollar gained ground against the yen on optimism emanating from a growing number of countries pushing to resume social and commercial activities after weeks being locked down.
At noon, the U.S. dollar fetched ¥107.86 compared with ¥107.74 in Tokyo at 5 pm Monday. U.S. financial markets were closed ahead of a national holiday.
Late on Monday afternoon, the euro was quoted at $1.0912 and ¥117.68 against $1.0876 and ¥117.18 in Tokyo.
After opening higher, Tokyo shares extended gains through the morning, while some companies that require close person-to-person interactions in urban areas have been allowed to resume, brokers said.
“Many problems that have been undermined by limitations on outings are particularly attracting investor attention,” said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co.
In addition, investors were encouraged by the government’s intention to prepare a new stimulus package to double the size of its economic initiatives to protect the country from the pandemic’s impact to over ¥200 trillion ($1.86 trillion), brokers said.
The new package, to be financed by a second extra budget planned for fiscal 2020, which started in April, would follow a record ¥117 trillion spending plan deployed last month to cushion the pandemic’s economic blow.
On the first section, advancing issues outnumbered decliners 1,562 to 522, while 84 finished the morning unaffected.
Department store operators also gained from Japan’s economic restart. Marui Group Co. leapt ¥92, or 5.1 per cent, to ¥1,885 and J.Front Retailing Co. was up ¥44, or 5.1 per cent, at ¥913.
Prime Minister Abe said late Monday that for all of Japan, including Tokyo and its surrounding areas, the state of emergency will be lifted and that the country has managed to bring the epidemic under control in less than two months.
Getting greater Tokyo, which accounts for around one-third of Japan’s gross domestic product, back on its feet, is crucial to the overall economic recovery of the country.
During the last quarter, the economy slipped into recession, and analysts are predicting another 22 per cent downturn during April-June due to the hit from the health crisis.