Japan’s Nikkei share average rose to a nine-month peak on Friday morning led by financials taking heart from rising yields, and the sentiment was boosted after US shares soared on hopes that President-elect Donald Trump’s policies could boost growth.
The Nikkei gained 1.6 per cent to 17,621.73 in early morning trade, the highest level since February 2, before it trimmed its gains and was up 1.1 per cent at 17,526.53 at 0154 GMT.
The Dow Jones Industrial Average surged to an all-time high, while the dollar soared to 106.950 yen overnight, its highest since July 21.
“Investors are partying around as Trump brought the punchbowl to the market,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Financial institutions such as insurers and banks, which are seeking compelling investment opportunities for their foreign debt investments in higher yields, soared after US Treasury yields climbed on the view that Trump’s economic policies would push up inflation.
Dai-ichi Life Holdings jumped 10 per cent, MS&AD Insurance soared 4.5 per cent and Mitsubishi UFJ Financial Group surged 8.3 per cent.
Non-ferrous metal stocks also gained ground, with Mitsubishi Materials Corp surged 7.2 per cent and Dowa Holdings gained 4.9 per cent after copper surged more than 5 per cent to a 16-month high on speculation that Trump could boost US construction spending.
“It’s like investors are drunk focusing on only good things, but the party won’t last forever,” Fujito said, adding that he was braced for sharp profit-taking soon because the market had soared too fast.
“I'm sure they (investors) will wake up to the reality that Trump has a protectionist view on trade policy, and it won't be good for Japan.”
Trump's election win dashed hopes for U.S. approval of a 12-nation pan-Pacific trade pact. The ratification of the TPP would be positive for Japanese equities.
Exporters extended their gains, propelled by a weaker yen. Toyota Motor Corp rose 2.5 per cent and Honda Motor Co gained 1.4 per cent.
The broader Topix added 1.3 per cent to 1,391.71 and the JPX-Nikkei Index 400 advanced 1.3 per cent to 12,507.70.