By Brad Frischkorn TOKYO--Tokyo stocks rose to a fresh eight-month closing high Monday following overwhelming Sunday election victories by the opposition Liberal Democratic Party and its allies, sparking more exporter-friendly yen weakening and a surge in utility shares such as Tokyo Electric Power Co.
The Nikkei Stock Average rose 91.32 points, or 0.9%, to 9828.88 following a prior session's 5.17-point advance. The closing mark was the highest for the benchmark index since April 3.
The Topix index of all the Tokyo Stock Exchange First Section issues also added 6.80 points, or 0.8%, to 807.84, with 27 of 33 subindexes ending in positive territory.
Trading volume was very heavy, totaling 2.85 billion shares, topping the 2.7 billion share mark for the third straight session. Trading value was also elevated at Y1.53 trillion.
Activity over the prior two sessions was heightened by the expiry and rollover of the quarterly December Nikkei futures contract last Thursday and Friday.
Sunday's poll numbers revealed that the main opposition Liberal Democratic Party, along with the New Komeito party, won more than two-thirds of the 480 seats in Sunday's lower house election, effectively allowing the LDP and its allies to take back control of government.
"The supermajority win means the incoming coalition can appoint a quantitative easing-friendly BOJ governor in April," notes CLSA equity strategist Nicholas Smith, stressing the gravity of the results. "The combination of an urgent reconstruction need and fixing the debt ceiling for five years means powerful fiscal stimulus is imminent. Credible plans are in motion to appreciably weaken the yen."
Still, the failure of the Nikkei to rise through its early high above 9900 likely means that prospects for powerful further market advances short-term are probably not so good, said an equity trading director at a foreign brokerage. "Rumors reflect that the BOJ will probably elect to implement more easing steps in January as opposed to immediately at its Dec. 19-20 summit, which struck as a bit of a disappointment today."
Exporters were generally higher on the back of the weaker yen, with Fanuc rising 1.4% to Y15,250 and Komatsu up 2.3% to Y1,980. Others in the space felt profit-taking pressure, however. Honda Motor edged up only 0.4% to Y2,840, while Canon lost 0.6% to Y3,140 and Nikon slipped 0.4% to Y2,378.
Heavily-weighted Fast Retailing was the single largest positive Nikkei contributor, gaining 2.9% to Y20,500--a new year-to-date closing high. Softbank also added 1.9% to Y2,987.
Utilities shares comprised the best performing sector, helped by a 33% surge in Tokyo Electric Power to its daily limit-up level of Y202, on heavy volume. Traders cited a few large orders from overseas hedge funds mid-morning as triggering a wave of short-covering.
"The Sunday vote count affords the LDP override power in parliament, and will be a powerful logjam-breaker in discussions about whether or not to re-start Japan's remaining idle nuclear reactors," noted Tachibana Securities market analyst Kenichi Hirano.
Other nuclear-related shares also posted sharp gains. Toa Valve Engineering rose 5.3% to Y1,025 while Okano Valve Mfg. soared 13% to Y232.
Other nuclear plant operators rose sharply, with Kansai Electric Power adding 18% to Y920.
Financial shares expected to benefit from more eventual BOJ monetary policy easing steps also outperformed the broader indexes as players seriously factored in a full 2% inflation target, as per LDP rhetoric.
Nomura Holdings surged 3.0% to Y377 and Dai-ichi Life Insurance gained 2.8% to Y99,900.
March Nikkei 225 futures closed up 60 points, or 0.6%, to 9820 on the Osaka Securities Exchange.
Write to Brad Frischkorn at [email protected]
The Nikkei Stock Average rose 91.32 points, or 0.9%, to 9828.88 following a prior session's 5.17-point advance. The closing mark was the highest for the benchmark index since April 3.
The Topix index of all the Tokyo Stock Exchange First Section issues also added 6.80 points, or 0.8%, to 807.84, with 27 of 33 subindexes ending in positive territory.
Trading volume was very heavy, totaling 2.85 billion shares, topping the 2.7 billion share mark for the third straight session. Trading value was also elevated at Y1.53 trillion.
Activity over the prior two sessions was heightened by the expiry and rollover of the quarterly December Nikkei futures contract last Thursday and Friday.
Sunday's poll numbers revealed that the main opposition Liberal Democratic Party, along with the New Komeito party, won more than two-thirds of the 480 seats in Sunday's lower house election, effectively allowing the LDP and its allies to take back control of government.
"The supermajority win means the incoming coalition can appoint a quantitative easing-friendly BOJ governor in April," notes CLSA equity strategist Nicholas Smith, stressing the gravity of the results. "The combination of an urgent reconstruction need and fixing the debt ceiling for five years means powerful fiscal stimulus is imminent. Credible plans are in motion to appreciably weaken the yen."
Still, the failure of the Nikkei to rise through its early high above 9900 likely means that prospects for powerful further market advances short-term are probably not so good, said an equity trading director at a foreign brokerage. "Rumors reflect that the BOJ will probably elect to implement more easing steps in January as opposed to immediately at its Dec. 19-20 summit, which struck as a bit of a disappointment today."
Exporters were generally higher on the back of the weaker yen, with Fanuc rising 1.4% to Y15,250 and Komatsu up 2.3% to Y1,980. Others in the space felt profit-taking pressure, however. Honda Motor edged up only 0.4% to Y2,840, while Canon lost 0.6% to Y3,140 and Nikon slipped 0.4% to Y2,378.
Heavily-weighted Fast Retailing was the single largest positive Nikkei contributor, gaining 2.9% to Y20,500--a new year-to-date closing high. Softbank also added 1.9% to Y2,987.
Utilities shares comprised the best performing sector, helped by a 33% surge in Tokyo Electric Power to its daily limit-up level of Y202, on heavy volume. Traders cited a few large orders from overseas hedge funds mid-morning as triggering a wave of short-covering.
"The Sunday vote count affords the LDP override power in parliament, and will be a powerful logjam-breaker in discussions about whether or not to re-start Japan's remaining idle nuclear reactors," noted Tachibana Securities market analyst Kenichi Hirano.
Other nuclear-related shares also posted sharp gains. Toa Valve Engineering rose 5.3% to Y1,025 while Okano Valve Mfg. soared 13% to Y232.
Other nuclear plant operators rose sharply, with Kansai Electric Power adding 18% to Y920.
Financial shares expected to benefit from more eventual BOJ monetary policy easing steps also outperformed the broader indexes as players seriously factored in a full 2% inflation target, as per LDP rhetoric.
Nomura Holdings surged 3.0% to Y377 and Dai-ichi Life Insurance gained 2.8% to Y99,900.
March Nikkei 225 futures closed up 60 points, or 0.6%, to 9820 on the Osaka Securities Exchange.
Write to Brad Frischkorn at [email protected]