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Home World Japan’s Nikkei hits 33-year high on weak yen, US optimism | Financial Markets

Japan’s Nikkei hits 33-year high on weak yen, US optimism | Financial Markets

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Japan’s stock market soared to its highest level since July 1990 after the United States agreed to raise its debt ceiling.

Japan’s Nikkei Stock Average climbed to its highest level since July 1990, buoyed by the U.S. debt ceiling deal and optimism about a weaker yen.

Shares of Japanese chip companies continued to outperform after their Wall Street peers rallied on the euphoria of AI.

The Nikkei Stock Average surged to 31,560.43 in the first 10 minutes of trading on Monday, but the gains slowed, with the index rising 1.32 percent to 31,325.84, breaking below noon, close to its trading low.

U.S. President Joe Biden on Sunday finalized a budget deal with House Speaker Kevin McCarthy and said the deal was ready to be put to a vote in Congress. But the deal has drawn backlash from hardline Republicans and progressive Democrats.

“There is still a certain amount of risk as the deal has not yet been completed, but with the basic agreement the risks have been receded and both sides are committed to avoiding a technical default,” said Maki Sawada, a strategist at Nomura Securities. Stated.

“The Nikkei average crossed the psychological level of 31,500 on Monday, but that level ultimately proved to be a bit too heavy,” she said. “We expect the Nikkei to rise steadily this week, but with a short-term retrace to confirm its speed.”

The broader Topix climbed to 2,175.13, but fell short of last week’s 33-year high of 2,188.66. It entered a break-break at 2166.41, down 0.96%.

The Nikkei Stock Average enjoyed an even bigger gain as the yen fell to the 141 level to the dollar for the first time in six months as it increased its weight in export stocks. Currency depreciation increases the value of foreign earnings.

Honda rose 1.86% while Subaru rose 1.78%.

Nikkei Shimbun’s top performer was Advantest, a chip inspection equipment maker whose customer is NVIDIA NVDA.O.

Advantest shares rose 6.9% to a record high, but fell 4.18%, the same rate as Nikon and startup investment firm SoftBank Group.

Of the 225 Nikkei 225 stocks, 193 stocks rose, 27 stocks fell, and 5 stocks remained flat.

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