Nikkei at two months high as Japan lifts emergency

Japanese stocks on Tuesday climbed to their highest in more than two months as investors cheered Prime Minister Shinzo Abe's decision to lift the state of emergency and end coronavirus-induced restrictions nationwide.

The benchmark Nikkei average rose 2.2% to 21,197.04 points, a level unseen since March 5, with air and land transport shares leading the rally.

Prime Minister Abe said late Monday that the state of emergency will be lifted for all of Japan, including Tokyo and its surrounding areas, and that the country managed to get the outbreak under control in under two months.

Getting greater Tokyo, which accounts for about one-third of Japan's gross domestic product, back on its feet is vital to the country's overall economic recovery.

The broader Topix rose 1.6% to 1,525.79, also its highest level in nearly 12 weeks, with all but one of 33 sector sub-indexes on the Tokyo exchange trading higher.

Air transport became the best performing sector on the main bourse for two days in a row, with Japan Airlines and ANA Holdings soaring 8% and 4.5%, respectively.

West Japan Railway jumped 6.7% and Central Japan Railway advanced 4.2%, also supported by hopes of demand rebound following the reopening from the lockdown.

Elsewhere, the index of Mothers startup market added 1.1% to a level unseen since January 2019.

AnGes Inc surged 16.4% after business daily Nikkei reported the biopharma venture is set to begin a clinical trial of a COVID-19 vaccine in July, raising hopes that the medication could secure government approval by the end of this year.

Bucking the overall market, Fujifilm Holdings Corp slipped 0.1% after Kyodo News reported that the Japanese government has given up on approving the company's Avigan drug for COVID-19 treatment by the end of May.