The Nikkei stock index closed at an all-time high Monday for the second consecutive trading day, as buying momentum was supported by expectations for robust corporate performance.
The 225-issue Nikkei Stock Average ended up 135.03 points, or 0.35 percent, from Thursday at 39,233.71. The broader Topix index finished 12.91 points, or 0.49 percent, higher at 2,673.62, its highest level since February 1990. Japanese markets were closed Friday for a public holiday.
On the top-tier Prime Market, gainers were led by pharmaceutical, precision instrument and bank shares.
The U.S. dollar remained mostly unchanged at the mid-150 yen level in Tokyo amid a lack of fresh trading cues.
At 5 p.m., the U.S. dollar fetched 150.46-47 yen compared with 150.49-59 yen in New York at 5 p.m. Friday.
The euro was quoted at $1.0832-0833 and 162.98-163.02 yen against $1.0816-0826 and 162.81-91 yen in New York late Friday afternoon.
The yield on the benchmark 10-year Japanese government bond fell 0.030 percentage point from Thursday's close to 0.685 percent, tracking a fall in long-term U.S. Treasury yields late last week.
On the stock market, a wide range of issues drew buying on optimism for upbeat earnings by Japanese companies, propelling the Nikkei index to refresh both its closing and intraday highs for the second straight trading day. The benchmark index surpassed the previous records set Thursday for the first time since December 1989.
"Japanese stocks are seen as cheap, with the added advantage of a weak yen. And low interest rates, inflation, and relatively cheap valuations make Japanese stocks even more attractive to foreign investors," said Seiichi Suzuki, chief equity market analyst at the Tokai Tokyo Research Institute.
But the upside was capped on Monday, as the selling of Tokyo Electron and other semiconductor-related stocks that surged last week on U.S. chip giant Nvidia Corp.'s positive earnings and outlook led to a slight market correction, Suzuki said.
"Whether it is due to caution over recent rises or profit-taking, it seems like there weren't as many buyers today as there were last week," he said, adding that investors are also keeping an eye on key U.S. economic indicators due out later this week.
Related coverage:
FOCUS: Nikkei's all-time high unlikely to serve as tailwind for PM Kishida
FOCUS: Tokyo stock market reaches uncharted territory, but where to next?
