Nikkei edges near 30-year high on recovery hopes

Nikkei edges near 30-year high on recovery hopes, heavy machinery stocks' gains

Representative image. Credit: AFP

Japanese shares inched up on Thursday to come within sight of a near three-decade high, as vaccine rollouts buoyed hopes of economic recovery from the Covid-19 pandemic and heavy machinery stocks gained on a policy shift to greener energy.

Japan's Nikkei share average rose 0.54% to 26,668.35, edging closer to Monday's high of 26,905, its highest level since early 1991. The broader Topix gained 0.51% to 1,774.27.

Rollouts of Covid-19 vaccines are propping up hopes that the economic recovery can gain momentum next year, despite the headwinds from a recently-found more infectious strain and a delay in U.S. pandemic relief package.

The Nikkei is likely to be stable between 26,000 and 27,000 for the time being, said Yutaka Miura, senior technical strategist at Mizuho Securities.

"But if the dollar falls considerably below 103 yen, we could see selling in Japanese shares," he added.

Aeon rose 3.5% to a record high after the retailer revised its earnings outlook higher for the year to February, as consumer confidence picked up after a coronavirus-induced slump.

Heavy machinery firms gained after the Nikkei newspaper reported Japan's new zero-emission strategy would target a massive increase in offshore wind power.

IHI rose 5.9% and Kawasaki Heavy gained 3.4%.

The positive mood also saw retail investors flocking to recently-listed shares, with WealthNavi gaining 21%.

On the other hand, Hino Motors tumbled 12.4% after the truck maker said it would suspend production at two factories in North America until next September due to problems in U.S. engine certification testing process.

SoftBank Group dropped 1.7% after China launched an investigation into Alibaba Group for suspected monopolistic behaviour and will summon its Ant Group to meet in coming days.

SoftBank Group is the biggest shareholder of the Chinese e-commerce giant.