Nikkei 225 Swings After Briefly Touching Fresh 33-Year High

(Bloomberg) -- Japan’s Nikkei 225 Stock Average erased earlier gains that saw the blue-chip gauge briefly surpass its June intraday peak to reach the highest level in 33 years. 

The index has gained about 29% this year, buoyed by an extended period of weakness in the yen, solid company earnings and corporate governance reforms championed by the Tokyo Stock Exchange.

It rose as much as 0.8% Monday to the highest since March 1990, before reversing the gain to be down 0.1% at 33,563.23 at 11:24 a.m. in Tokyo. Exporters led losses in the Nikkei and the broader Topix benchmark, as the yen strengthened slightly after hitting its 2023 low earlier this month.

Traders are in a wait-and-see mood given holidays in both Japan and the US later in the week, and ahead of Nvidia Corp.’s earnings on Tuesday likely to provide a cue for tech stocks, said Hirokazu Kabeya, chief global strategist at Daiwa Securities Co. There is a lack of positive news to push the Nikkei up to 34,000, he added. 

Among the stocks that led the early increase Monday were Tokio Marine Holdings Inc., which announced strong earnings and a share buyback, and Panasonic Holdings Corp., which is considering listing its auto-related business. 

The Nikkei on Friday capped its third-straight week of gains, its longest such win streak since June. An extra push came from soft US inflation data that bolstered bets that the Federal Reserve’s aggressive tightening is over.

“The structural undercurrents in the Japanese economy continue to power through Japanese equities, which are also getting some help now from the market expecting the Fed rate hike cycle to have ended,” said Charu Chanana, market strategist at Saxo Markets. “A strong domestic earnings season has been the cherry on the cake.”

--With assistance from Akemi Terukina.

(Adds latest moves in Nikkei)

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