japan shares: Japan shares edge up as stimulus cheer lifts cyclicals, SoftBank drags

TOKYO: Japanese shares inched higher on Monday as optimism around the passage of a massive U.S. stimulus package boosted cyclical stocks, although declines in SoftBank Group and other tech companies limited gains.

The Nikkei share average edged up 0.17 per cent to close at 29,766.97, while the broader Topix gained 0.91 per cent to close at 1,968.73.

“Today’s market in Japan is a reflection of the U.S. market on Friday,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

The Dow Jones Industrial Average rose to its fifth consecutive record high on Friday as the U.S. House of Representatives gave final approval to the $1.9 trillion COVID-19 relief bill.

“Investors are buying cyclical shares that would benefit from a recovery of the U.S. economy, which would be accelerated by the huge economic package that was approved,” Arisawa said.

Japanese transport and materials stocks advanced.

Ship builder Mitsui E&S Holdings jumped 7.78 per cent, while shipping firms Kawasaki Kisen and Nippon Yusen rose 7.02 per cent and 4.74 per cent, respectively.

ANA Holdings jumped 4.43 per cent and Japan Airlines advanced 3.79 per cent.

E-commerce firm Rakuten surged 24 per cent after announcing a capital tie-up with postal giant Japan Post Holdings, making it the biggest gainer in the Nikkei. Japan Post gained 2.49 per cent.

Japan’s tech shares fell tracking Nasdaq’s decline on Friday, with Nikkei heavyweight SoftBank Group down 2.49 per cent.

Tokyo Electron lost 1.56 per cent and Advantest fell 1.26 per cent.

Amid rising U.S. bond yields, Japan’s largest banks gained the most among the top 30 core Topix names, with Mitsubishi UFJ Financial Group up 4.12 per cent, followed by Sumitomo Mitsui Financial Group, which gained 3.55 per cent.

The underperformers among the Topix 30 were SoftBank Group, followed by Nidec losing 2.24 per cent.