Nikkei Average Briefly Tops 70,000 for 1st Time

Tokyo, June 16 (Jiji Press)–Japan’s benchmark Nikkei average surpassed the 70,000 threshold for the first time ever at one point on Tuesday after the Bank of Japan decided to raise interest rates in line with market expectations. The index of 225 selected issues on the Tokyo Stock Exchange’s top-tier Prime section rose as high as 70,020.68 before finishing at a new record closing high of 69,404.50, up 87.00 points, or 0.12 pct, from Monday. On the other hand, the broader TOPIX index fell 8.46 points, or 0.21 pct, to 3,991.14. Buying picked up after the BOJ decided at its two-day policy-setting meeting that ended earlier on Tuesday to raise its policy interest rate from 0.75 pct to a 31-year high of 1 pct. “Investors seemed to be on the sidelines in the morning, but a sense of relief spread after the outcome of the policy-setting meeting was reported,” said Maki Sawada, a strategist at Nomura Securities Co. The Nikkei’s rise, however, was somewhat limited due to profit-taking pressure amid growing concerns over an overheating market following recent sharp gains. Its ascent relied heavily on only a few artificial intelligence- and semiconductor-related issues. Around 70 pct of the Prime section issues fell on the day, while only about 30 pct rose. “It seems difficult (for the stock index) to stay above 70,000, given the current corporate profit levels and other factors,” said Shingo Ide, a senior equity strategist at NLI Research Institute. “The Nikkei average will likely fluctuate while waiting for corporate profit growth and the return of normalcy to the Strait of Hormuz.” END [Copyright The Jiji Press, Ltd.]