Nikkei edges up to new 27-year high as weaker yen fans earnings hopes
TOKYO: Japan's Nikkei edged up to a fresh 27-year high on Tuesday, building on recent strength thanks to upbeat earnings hopes, while Ono Pharmaceutical surged on news that a Nobel Prize was awarded to researchers for a cancer-fighting method used in its drug Opdivo.
The Nikkei share average ended 0.1 per cent higher at 24,270.62, hovering at levels not seen since November 1991.
The gains in the benchmark have been underpinned by the prospect of stronger corporate earnings on the back of a weaker yen. The benchmark index has comfortably stayed above the 24,000-line since last Friday.
The Nikkei rallied 5.5 per cent in September, and its sharp gains in the short-period of time make the market prone to profit-taking, but the underlining mood remains positive, traders said.
"Investors take heart from the global economy's strength and prospects for brighter earnings forecasts as they start reporting earnings later this month," said Takuya Takahashi, a strategist at Daiwa Securities.
While many companies based their dollar-yen assumptions at around 105-107 this fiscal year, the current levels are boosting hopes that manufacturers, which export their goods overseas, will raise their annual earnings forecasts, he said.
The dollar surged to as high as 114.06 yen in the previous session, its strongest since November last year, before trading flat at 113.77 yen on Tuesday.
Shares of Ono Pharmaceutical Co jumped as much as 6.9 per cent to hit 3,430 yen, the highest level since August 2016, before ending up 3.1 per cent on news that a Nobel Prize was awarded to researchers for a cancer-fighting method used in Opdivo, a drug it co-developed with Bristol-Myers Squibb Co .
On the weak side, discount clothing chain Shimamura Co tumbled 8.2 per cent after the company revised lower its earnings forecast for the year ending February 2019. It now expects a net profit of 27.3 billion yen, down from previously forecast 35 billion yen.
The broader Topix was up 0.3 per cent at 1,824.03.