Upbeat corporate earnings, hopes for a U.S. recovery and robust growth data for Japan's pandemic-hit economy injected fresh vigor into the Tokyo stock market Monday, pushing the Nikkei index to close above the 30,000 mark for the first time in more than 30 years.
The 225-issue Nikkei Stock Average ended up 564.08 points, or 1.91 percent, from Friday at 30,084.15, its highest close since Aug. 2, 1990, when the Japanese economy was experiencing an asset bubble.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 20.06 points, or 1.04 percent, up at 1,953.94, its highest close since June 3, 1991.
Shares gained ground throughout the day following the release of Japanese gross domestic product data showing a better-than-expected recovery from the coronavirus pandemic-induced slump in the October-December period.
GDP in the last quarter of 2020 grew a real 3.0 percent, or an annualized 12.7 percent, from the previous quarter, led by a leap in exports and robust private consumption. Capital spending also rose.
"Strong exports were foreseen from recent earnings reports, but the expansion in private consumption was bigger-than-expected, showing that businesses outside the dining out sector were solid," said Koichi Fujishiro, a senior economist at the Dai-ichi Life Research Institute.
Private consumption accounts for more than half of Japan's GDP.
The Nikkei has nearly doubled since the pandemic pushed the benchmark index down to as low as 16,552.83 last March, a recovery analysts have attributed to massive monetary easing by central banks and hefty fiscal spending by governments around the world.
Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co., said the impeachment acquittal of former U.S. President Donald Trump on Saturday also supported the market as hopes grew for a sooner-than-expected rollout of stimulus measures.
But with the earnings reporting season nearing an end, the Nikkei's advance may slow, Kamitani said.
The index is expected to move within a range of 1,000 points around the 30,000 threshold for about a month amid caution about chasing the upside, he said.
With the Nikkei's rapid rise of more than 8 percent this month, some brokers said the market is overheated and the index's level is too high relative to Japan's economic condition.
The market showed little reaction to a major earthquake that rocked the northeastern region of Japan on Saturday, causing more than 150 injuries, brokers said.
The U.S. dollar rose to the lower 105 yen range as the yen was sold on advances in U.S. long-term interest rates late last week to their highest level since last March.
At 5 p.m., the dollar fetched 105.17-18 yen compared with 104.87-97 yen in New York and 104.92-93 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.2132-2133 and 127.59-63 yen against $1.2113-2123 and 127.13-23 yen in New York and $1.2115-2116 and 127.11-15 yen in Tokyo late Friday afternoon.
The yield on the benchmark 10-year Japanese government bond rose 0.015 percentage point from Friday's close to 0.075 percent as the safe-haven debt was sold on a rise in Tokyo stocks.
On the First Section, advancing issues outnumbered decliners 1,339 to 773, while 81 ended unchanged. Gainers were led by mining, precision instrument, and oil and coal product issues.
Olympus jumped 252.00 yen, or 12.2 percent, to 2,314.00 yen after the major Japanese optical equipment maker upgraded on Friday its earnings forecast for fiscal 2020 on a recovery in endoscope sales.
Asahi Group Holdings climbed 156 yen, or 3.5 percent, to 4,584 yen, after the beverage maker forecast on Friday a better-than-expected net group profit for 2021.
Renesas Electronics rose 8 yen, or 0.6 percent, to 1,290 yen a day after the semiconductor maker said its factories in eastern Japan had experienced limited impact from the quake.
Some financial issues were higher on rising U.S. long-term interest rates, with Dai-ichi Life Holdings gaining 58.50 yen, or 3.2 percent, to 1,875.50 yen and Mizuho Financial Group rising 22.50 yen, or 1.5 percent, to 1,552.50 yen.
Trading volume on the main section fell to 1,275.91 million shares from Friday's 1,343.98 million shares.