The Japanese stock market rises to the highest level since July 1990 after the US finalizes a deal to raise the debt ceiling.
Japan’s Nikkei stock average rose to its highest level since July 1990, buoyed by optimism about a US debt ceiling deal and a weaker yen.
Shares of Japanese chip-related companies continued to outperform after AI euphoria lifted their Wall Street peers.
The Nikkei jumped as high as 31,560.43 in the first 10 minutes of trading on Monday, though gains were tempered as the index entered midday with a break of 1.32 percent at 31,325.84, near the session low. .
US President Joe Biden said on Sunday that he had finalized a budget agreement with House Speaker Kevin McCarthy, and the deal was ready to go to Congress for a vote. However, the deal has been criticized by hardline Republicans and progressive Democrats.
“The deal is not closed, so there is still a level of risk, but the basic agreement has made the risks less and both parties have committed to avoiding a technical default,” said Maki Sawada, strategist at Nomura Securities.
“The Nikkei crossed the psychological mark of 31,500 on Monday, but in the end, that level proved too heavy,” he said. “This week, I expect the Nikkei to rally steadily, but with short-term pullbacks to check its speed.”
The broader Topix rose as high as 2,175.13, but failed to get anywhere near last week’s 33-year high at 2,188.66. It entered the break down 0.96 percent at 2,166.41.
The Nikkei’s heavier weighting towards exporter stocks saw it take further gains from the yen’s plunge to a peak of 141 to the dollar for the first time in six months. A weaker currency boosts the value of foreign earnings.
Honda Motor rose 1.86 percent and Subaru added 1.78 percent.
The Nikkei’s joint top performer was Advantest, the chip test equipment maker that counts Nvidia Corp NVDA.O among its clients.
Advantest shares rose as much as 6.9 percent to a record high, though they entered the division up 4.18 percent, tied with Nikon and startup investor SoftBank Group.
Of the 225 Nikkei components, 193 were up, 27 were down and five were flat.