A U.S. debt ceiling deal and a cheaper currency lifted Japan’s Nikkei share average to its highest level since July 1990 on Monday.
Japanese chip companies outperformed Wall Street peers amid AI excitement.
The Nikkei (.N225) rose as high as 31,560.43 in the first 10 minutes of trading before settling at 31,325.84, close to the session low, up 1.32%.
On Sunday, U.S. President Joe Biden announced a budget agreement with House Speaker Kevin McCarthy that was ready for a vote in Congress. Hardline Republicans and progressive Democrats oppose the plan.
“The deal is not done, so there’s still a level of risk, but the basic agreement has seen risks recede and both sides have committed to avoiding a technical default,” said Nomura Securities strategist Maki Sawada.
“The Nikkei crossed the psychological 31,500 mark on Monday, but in the end that level proved a bit too heavy,” she remarked. “This week, I expect the Nikkei to steadily advance, but with short-term retracements to check its speed.”
The Topix (.TOPX) reached 2,175.13 but failed to match last week’s 33-year peak of 2,188.66. 0.96% higher at 2,166.41, it broke.
The yen’s dip to 141 per dollar for the first time in six months benefited the Nikkei’s exporter stock weighting. This is because a weaker currency boosts overseas revenue.
Honda Motor (7267.T) rose 1.86%, and Subaru (7270.T) was 1.78%.
The Nikkei’s joint best performer was chip-testing equipment firm Advantest (6857.T), which works with Nvidia Corp (NVDA.O).
Advantest shares rose 6.9% to a record high after entering the break up 4.18%, tied with Nikon (7731.T) and startup investor SoftBank Group (9984.T).
One hundred ninety-three of Nikkei’s 225 components gained, 27 declined, and five were steady.
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