Nikkei hits 30-year high, financials boost Topix after Georgia runoffs

  • Reuters
  • Stock Market News
Nikkei hits 30-year high, financials boost Topix after Georgia runoffs
Credit: © Reuters.

TOKYO, Jan 7 (Reuters) - Japanese shares rose to multi-year highs on Thursday, powered by financials as U.S. bond yields climbed on hopes of larger debt-financed stimulus following a Democrat sweep in two Senate runoffs in Georgia.

The Nikkei average .N225 rose 1.91% to 27,571.87 by late morning, briefly hitting its highest level since August 1990.

The broader Topix .TOPX added 2.24% to 1,836.37, climbing above a peak hit late last year to reach its highest level since October 2018.

Investor appetite was not dented by the chaos in Washington D.C. after supporters of President Donald Trump stormed Capitol Hill, forcing Congress to suspend a session to certify President-elect Joe Biden's victory.

"That seemed like the ultimate epitome of four years of Trump's presidency. But no one thinks the election results will be overthrown by this," said Takashi Hiroki, chief strategist at Monex.

Sharp rises in U.S. bond yields boosted shares of Japanese banks and insurers, big investors in U.S. debt.

Dai-ichi Life Holdings 8750.T rose 8.5% and T&D Holdings 8795.T gained 8.6%.

Among banks, SMFG 8316.T gained 5.0%, while Mizuho 8411.T added 4.8% and Mitsubishi UFJ 8306.T rose 3.7%.

Other cyclical, value shares also gained on hopes of a stimulus package from the incoming Biden U.S. administration.

Topix Value Index .TOPXV gained 2.6%, outperforming 2.0% rise in Topix Growth .TOPXG .

Steelmakers .ISTEL.T gained 5.3%, with Nippon Steel 5401.T rising 7.5%. Ship builder Hitachi Zosen 6501.T surged 13.5%.

Domestic leisure-related shares, such as railway companies .IRAL.T , bounced back even as the Japanese government looked set to declare a state of emergency for the greater Tokyo area on rising COVID-19 infections. economic impact would be much smaller than previous declarations as it is confined to Tokyo and restrictions will be limited," said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

SoftBank Group 9984.T dropped 1.6% after the news that the Trump administration is considering adding Alibaba (NYSE: BABA ) Group Holding Ltd 9988.HK to its trade blacklist of Chinese companies. Group is the largest shareholder of the Chinese e-commerce giant.

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