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Japanese shares advance on reopening hopes

Japanese shares

The benchmark Nikkei average rose 1.5% to 20,682.78 by midday, with cyclical stocks leading the rally

Japanese shares advanced on Monday as the government looked set to end the state of emergency in Tokyo and surrounding areas, raising hopes that the world’s third-largest economy may soon start recovering from recession.

The benchmark Nikkei average rose 1.5% to 20,682.78 by the midday break, with cyclical stocks leading the rally.

Japan plans to hold a panel discussion later in the day to decide whether to lift state of emergency measures in Tokyo and four other prefectures, including the northern island of Hokkaido, which are still under restrictions.

Getting greater Tokyo, which accounts for about one-third of Japan’s gross domestic product, back on its feet is vital to the country’s overall economic recovery.

The broader Topix gained 1.3% to 1,496.32, with all 33 sector sub-indexes on the Tokyo exchange trading higher.

Highly cyclical air transport, iron and steel, and real estate were the three top-performing sector sub-indexes on the main bourse.

It’s quiet with U.S. and UK markets closed for Memorial Day and bank holiday, respectively, but the benchmark Nikkei remains on a short-term uptrend, said Takeo Kamai, head of executions services at CLSA in Tokyo.

Indeed, the volume of shares traded on the main board was valued at only 851 billion yen ($7.9 billion) by the midday recess, well below the average value.

Fujifilm Holdings Corp shed 3.8% after the company refrained from providing profit projections for the current business year through March 2021, citing uncertainties brought on by the COVID-19 pandemic.

Elsewhere, the index of Mothers, a startup market in the Tokyo Stock Exchange, climbed 3.2% to a level unseen since April 2019.

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