Synopsis

Chipmaking equipment giant Tokyo Electron was the Nikkei’s biggest support, providing 50 of the index’s 310-point surge with its 3.1% advance. Sony also stood out with a 2.56% jump

Japan's Nikkei scales 3-month peak on Wall Street's lead; tech paces gainsAP
Japan’s Nikkei share average rallied more than 1% on Monday to hit a three-month high, tracking gains on Wall Street in the previous session after U.S. Federal Reserve officials calmed fears of policy overtightening.

Rate-sensitive tech shares outperformed in Japan, just like in the U.S., after comments from Richard Fed President Thomas Barkin that inflation is “likely past peak,” which helped to rein in long-term Treasury yields from multi-month highs. A day earlier, Atlanta Fed chief Raphael Bostic hinted that a peak in rates may come in summer.

Chipmaking equipment giant Tokyo Electron was the Nikkei’s biggest support, providing 50 of the index’s 310-point surge with its 3.1% advance. Sony also stood out with a 2.56% jump.

Startup investor SoftBank Group climbed 2.74%, getting additional momentum from news that its subsidiary Arm Ltd aims to raise at least $8 billion from a U.S. listing.

The Nikkei rose 1.11% to end at 28,237.78. The index had opened above the key psychological 28,000 mark and then probed as high as 28,288.62 for the first time since Dec. 1 earlier.

Of the Nikkei’s 225 components, 161 rose, 59 fell and five were flat.

The broader Topix gained 0.84% to 2,036.49.

Further gains for Japanese stocks this week could be hard with Fed Chair Jerome Powell giving testimony to Congress on Tuesday and Wednesday, followed by Bank of Japan Governor Haruhiko Kuroda’s final policy meeting running the following two days.

The pivotal U.S. non-farm payrolls report is also due on Friday, which will be the final day for Fed speak before the black out period going into a policy meeting on March 22.

“The topside must be starting to get heavy considering we also had a more than 400-point rally on Friday” in the Nikkei, Nomura Securities strategist Maki Sawada said.

“The recovery to back above 28,000 happened really suddenly.” (Reporting by Kevin Buckland; Editing by Rashmi Aich)

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