Nikkei Continues Its Rise Amid Hopes for More Support Measures

The Tokyo stock exchange continued to advance on Tuesday, reaching its highest level in five months.

 

Hopes that the successor to Japanese Prime Minister Yoshihide Suga, who has indicated that he will not stand for election, will come up with new stimulus measures to further boost the economic recovery continued to fuel optimism among investors. In addition, stronger than expected growth in Chinese exports also supported the trade.

The Nikkei in Tokyo ended 0.9 percent higher at 29,916.14 points and touched the 30,000-point limit for the first time since the beginning of April. The main index gained nearly 5 percent in the past three trading days on news that Suga is stepping down as leader of the Liberal Democratic Party (LDP). Former Foreign Minister Fumio Kishida, a possible successor to Suga, pleaded in Japanese media for a support package of 30 trillion yen, converted around 230 billion euros, to further cushion the economic blow of the corona pandemic.

Tech investor SoftBank gained 9 percent after a share swap with Deutsche Telekom. The German telecom group expands its stake in T-Mobile US to more than 48 percent. In exchange, SoftBank will receive a 4.5 percent stake in Deutsche Telekom. Electronic component maker Murata Manufacturing and sensor manufacturer Keyence rose around 5 percent.

The two companies will be included in the Nikkei 225 next month. Computer game maker Nintendo (plus 0.8 percent) is also promoted to the main index. On the other hand, Nisshinbo Holdings and Toyo Seikan are removed from the index and plunged 11 and 15 percent.

The Shanghai stock exchange traded 1.2 percent in the plus, and the Hang Seng index in Hong Kong climbed 0.9 percent. Chinese customs figures showed that August exports rose by 25.6 percent from a year ago. Economists had expected export growth of around 17 percent. Imports also increased significantly. Chinese internet group Tencent gained almost 3 percent in Hong Kong after buying back its own shares. The All Ordinaries in Sydney fell 0.1 percent. The Australian central bank kept interest rates unchanged at 0.1 percent, as expected.

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