Nikkei Marks Record Closing High above 69,000

Tokyo, June 15 (Jiji Press)–Japan’s benchmark Nikkei 225 stock average shot up to a new all-time closing high on Monday, propelled by risk appetite fueled by a U.S.-Iran agreement to end their ongoing armed conflict. The index of 225 major issues listed on the Tokyo Stock Exchange’s top-tier Prime section surged 3,297.46 points, or 4.99 pct, from Friday to end at 69,317.50, finishing above 69,000 for the first time ever and posting the second-largest daily point gain on record. The broader TOPIX index surged 117.64 points, or 3.03 pct, to 3,999.60, also a record closing high. Investors rushed to buy a wide range of stocks from the outset, following U.S. President Donald Trump’s announcement on social media that a deal had been reached to end the U.S.-Iran conflict. With the announcement easing uncertainties over the Middle East situation, an official of a major brokerage firm said, “Rising prices and interest rates caused by higher crude oil prices that had weighed on the stock market are now expected to go away.” “The outlook for the global economy and corporate earnings will likely improve” if the de facto blockade of the Strait of Hormuz, a key oil chokepoint, is lifted and the supply of crude oil returns to normal, said an official of a Japanese securities firm. Another brokerage firm official said that the Nikkei average may reach 70,000 on Tuesday as the European and U.S. stock markets are also expected to react positively to the announcement when they reopen on Monday. The Tokyo stock market was backed by a drop in crude oil futures amid hopes for the reopening of the Strait of Hormuz, with the U.S. benchmark West Texas Intermediate crude oil futures contract falling to a three-month low near 80 dollars per barrel. While stocks related to artificial intelligence and semiconductors have led the Tokyo market’s recent rapid advance, anticipation that crude oil markets will calm encouraged buying in a wider range of stocks on Monday, according to a market source. Buying of AI- and semiconductor-related issues also remained strong, with only five of them–SoftBank Group, Advantest, Tokyo Electron, Ibiden and Kioxia Holdings–pushing up the Nikkei average by about 2,000 points. Meanwhile, a sense of overheating has grown in the market. “There is the risk of a sharp fall following a rapid ascent,” said an official of a major asset management firm. In Tokyo currency trading on Monday, moves to unwind dollar purchases in time of emergency supported the yen. Still, the Japanese currency’s rally was limited due to “lingering uncertainty over the effectiveness of the U.S.-Iran deal,” said a Japanese bank official. At 5 p.m. Monday, the dollar stood at 160.12-13 yen, down from 160.27-28 yen at the same time Friday. The euro was at 1.1606-1606 dollars, up from 1.1567-1567 dollars, and at 185.82-83 yen, up from 185.39-40 yen. END [Copyright The Jiji Press, Ltd.]