Japan's Nikkei Stock Average Hits More Than 11-Month High after US Stocks Rally
The Nikkei .N225 rose 1.64% to 40,809.82 by the midday break, hitting its highest level since July 17. The index rose for a fifth straight session.
The broader Topix .TOPX rose 0.96% to 2,867.82.
A strategist at a domestic brokerage said a rally of U.S. equities last week and hopes of Fed rate cuts, as well as easing tension in the Middle East helped investors to turn 'risk-on'.
'The Nikkei's gains are sharp and there will be some adjustment, but that will be very limited because Japanese stocks are still underperforming their global peers,' said Koichi Kurose, chief strategist, Resona Asset Management.
Wall Street extended its rally on Friday, sending the S&P 500 and Nasdaq to all-time closing highs as trade deal hopes fueled investor risk appetite and economic data helped solidify expectations for rate cuts from the U.S. Federal Reserve.
In Japan, start-up investor SoftBank Group 9984.T jumped 5% to become the biggest source for the Nikkei's gains. Chip-making equipment maker Tokyo Electron 8035.T and chip-testing equipment maker Advantest 6857.T rose 2.78% and 2.88%, respectively.
'There is an expectation that domestic spending may grow towards the end of the year as utility costs could become lower due to falling oil prices and a stronger yen,' said Kurose.
All but two of the Tokyo Stock Exchange's 33 industry sub-indexes rose, with the precision machinery sector .IPRCS.T rising 2.21% to become the top percentage gainer.
Medical equipment maker Olympus jumped 6% after falling in four straight sessions.
The automaker sector .ITEQP.T inched down 0.6% after U.S. President Donald Trump said in an interview broadcast on Sunday that Japan engages in 'unfair' automobile trade with the U.S.
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