A leap in banking stocks and strength in export-focused sectors pushed the Nikkei 225 above 17,000 for the first time in more than five years on Thursday.
The Nikkei closed 0.6 per cent higher at 17,045.34. The Topix, in which banks have a particularly strong weighting, rose 0.9 per cent to 1,726.68.
The banking sector jumped 3 per cent, after a report from an influential Goldman Sachs analyst raised the bank’s 2005-06 and 2006-07 profit estimates for eight large banks. Goldman cited various factors, including strong fee income growth. Mitsubishi UFJ, the world’s biggest bank by assets, leapt 4.1 per cent to Y1,780,000. Mizuho, its largest rival in Japan, was up 2.4 per cent to Y955,000.
The combination of continued dollar strength and an overnight rise in the US stock market proved a winning combination for Japanese export-focused sectors.
Transport equipment rose 1.1 per cent. Toyota, Japan’s biggest carmaker, gained 1.3 per cent to Y6,470. Nissan rose 0.7 per cent to Y1,401.
Faced with such favourable factors, the market ignored disappointing figures for industrial production – which many analysts are wary of as a guide to industrial health because of the continuing trend towards moving production overseas.
Electrical machinery, another strongly export-focused sector, also rose sharply. Sony, the consumer electronics and entertainment giant, was up 1.5 per cent to Y5,450. Hitachi, the electronics conglomerate, was up 1.4 per cent to Y822.
Real estate continued its rise following last week’s benign national land price survey, gained another 1.8 per cent. Mitsui Fudosan, Japan’s biggest property company, climbed 1.5 per cent to Y2,675. Mitsubishi Estate, its largest rival, was also up 1.5 per cent to Y2,755. Tokyu Land jumped 2.3 per cent to Y1,046.
Isuzu Motors rose 2.3 per cent to Y436 following the news that General Motors was considering selling some or all of its share in the company.