Japanese stocks continued to rise on Monday after the Topix reached a 30-year high. The major winners on the day were electronics stocks, which gained 1.3%; itself the highest level achieved since August 1990.
Much of the gains came after it was announced that current Japanese Prime Minister Yoshihide Suga will step down. Due to hopes that the new prime minister would have more favorable policies towards mobile phone bills, investor confidence in the telecommunications sector rose.
The Nikkei 225 Stock Average managed a significant 1.8% gain, with Fast Retailing Co. and Tokyo Electron Ltd. proving to be the biggest contributors.
While Japan initially embraced light virus restrictions for prolonged periods of time, this strategy proved ineffective in curbing the ongoing pandemic’s effects on citizens’ wellbeing. Despite government and central bank efforts to limit economic deterioration, several emergency measures continue to be enforced.
The Topix is up 13% this year, and while it outpaces most Asian stock indexes, it continues to trail the 21% gain achieved by the S&P 500.
Hajime Sakai, chief fund manager at Mito Securities Co. reflected on the Topix’s lagging behind US stocks, remarking that: “Earnings have been rising but stock prices weren’t, and foreign investors weren’t buying. With this news, they may revisit and raise weights for Japanese stocks.”
