Nikkei closes just shy of 18,500 mark

The Nikkei 225 average gained further ground Monday on higher U.S. equities and the yen’s drop, briefly topping 18,500 for the first time in about 14 years and 10 months.

After topping the threshold, the key market gauge closed up 134.62 points, or 0.73 percent, at 18,466.92, the highest close since April 24, 2000, and rising for the fourth straight trading day. On Friday, it rose 67.51 points.

The Topix was up 2.50 points, or 0.17 percent, to finish at 1,502.83, extending its winning streak to a sixth session. The broader index climbed 5.40 points Monday.

The TSE got off to a firmer start after Wall Street staged a sharp rally Friday as concerns over the Greek debt crisis receded. The yen’s retreat past 119 to the dollar also helped lift the market, brokers said.

The Dow Jones industrial average renewed a record high after an agreement was reached Friday at a meeting of eurozone financial ministers to extend financial assistance to Greece by four months.

Following the surge in U.S. equities, along with rises in major European shares, mainstay issues in the Tokyo market attracted buying, sending the Nikkei above 18,500 for the first time since May 2, 2000, on an intraday basis.

A bank-affiliated securities firm official said many investors were hoping to buy on dips on expectations of further rises in stocks, but there have recently been no such opportunities.

In the last two weeks, the Nikkei has fallen only three sessions, with the loss being smaller than 100 points each time.

On Monday, profit-taking weighed on the market in the afternoon, sending the Topix briefly into negative territory.

Several technical indicators suggested the market has been overheating, with the advance-decline ratio on the TSE’s first section exceeding 120, which is seen as the threshold for an overbought market, brokers said.

Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc., pointed to profit-taking amid a sense of market overheating.

“Although the market is expected to continue to be in an upward trend, it may face a sharp correction sometime soon,” he said.

Despite the key market gauges’ gains, falling issues outnumbered rising ones 923 to 816 on the first section, while 123 issues were unchanged.

Volume grew to 2.491 billion shares from Friday’s 2.406 billion.

Share prices rose for clothing store operator Fast Retailing as well as mobile phone carriers KDDI and SoftBank, all heavily weighted components of the Nikkei average.

Other major winners included railway operators JR Tokai, JR West and JR East, automakers Toyota and Fuji Heavy, and electronic device makers TDK and Nitto Denko.

Euglena shot up 12.5 percent on a news report that the biotechnology firm will build a refinery plant for aircraft biofuel in Japan.

On the other hand, industrial robot-maker Fanuc, automaker Honda, Sumitomo Realty and oil developer Inpex lost ground.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average closed up 100 points at 18,460.

Nikkei Futures

nikkeifutures.org@imediaone.com

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