TOKYO: Tokyo's benchmark Nikkei index jumped nearly 2 per cent on Monday (Feb 15) on hopes for business recovery, closing above the psychologically important 30,000 mark for the first time in more than three decades.
The Nikkei 225 index rose 1.91 per cent, or 564.08 points, to 30,084.15, the highest close since 1990.
The broader Topix index advanced 1.04 per cent, or 20.06 points, to 1,953.94.
The strong buying in Tokyo was driven by news that the Japanese economy grew at a nearly 13 per cent annual pace in the last quarter, and by strong corporate earnings reports. It was the second straight quarter of growth after a downturn drastically worsened by the impact of the pandemic.
The recovery should put the economy on track to recover to pre-pandemic levels by next year, helped by a recovery in demand for exports in the US and other major trading partners, Marcel Thieliant of Capital Economies said in a report.
Japan recently re-imposed a state of emergency in Tokyo and several other prefectures to battle a resurgence of outbreaks. But sustained corporate investment and government spending are expected to help offset the impact on travel, restaurants and other sectors most affected.
“And while most economists expect a renewed contraction this quarter due to the second state of emergency, we think that output will be broadly flat in Q1 and rise more strongly this year than almost anyone anticipates," Thieliant said.
Market sentiment has also been supported by hopes for business recovery ahead of the nation's first vaccination, said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.
The coronavirus vaccine roll-out is scheduled to start as early as Wednesday in Japan for healthcare professionals.
"Hopes for stimulus and monetary easing are also high, which helped bolster positive sentiment," Horiuchi told AFP.
"But profit-taking could emerge at this level as the market is overheating," he added.