Tokyo: Tokyo stocks have surged 0.75 per cent to a 7 year high as the US dollar got stronger against the yen in the reaction of OPEC’s decision not to cut production.
The Nikkei 225 index at the Tokyo Stock Exchange added 130.25 points to 17,590.10 on Monday, while the Topix index of all first-section shares rose 0.80 per cent, or 11.31 points, to 1,421.65.
“A couple of days of profit-taking last week has allowed for some of the ‘overheatedness’ to dissipate from the market, making way for this week’s rise,” said Yutaka Miura, senior technical analyst at Mizuho Securities.
“Once the Nikkei breached the 17,500 level, a good deal of short-covering was seen occurring; the market could easily see 18,000 next week,” Miura told Dow Jones Newswires.
The US dollar climbed to 118.84 yen from 118.65 yen in New York on Friday afternoon, providing strong support for Japanese exporters as the yen weakens.
Also boosting sentiment, capital spending among Japanese firms rebounded 3.1 per cent in the third quarter as investors look ahead to the release of revised economic growth figures next week.
Some analysts expect an upward revision that would pull Japan out of a technical recession.
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