Tokyo stocks rose sharply Monday morning after the Dow Jones Industrial Average climbed to a record high late last week on the back of positive U.S. earnings reports.
The 225-issue Nikkei Stock Average rose 383.78 points, or 1.39 percent, from Wednesday to 27,931.78. Japanese markets were closed Thursday and Friday for national holidays.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 26.63 points, or 1.40 percent, at 1,931.04.
Every category industry gained ground, except for electric power and gas issues. Major gainers were led by iron and steel, and textile and apparel issues.
The U.S. dollar slightly weakened to the lower 110 yen range from the mid-110 yen level, as the unit was weighed down by the Nikkei index trimming some gains and a drop in Chinese stocks, dealers said.
At noon, the dollar fetched 110.36-37 yen compared with 110.48-58 yen in New York at 5 p.m. Friday.
The euro was quoted at $1.1771-1772 and 129.92-96 yen against $1.1763-1773 and 130.07-17 yen in New York late Friday afternoon.
Stocks gained ground after the Dow Jones Industrial Average and the tech-heavy Nasdaq index rose to record highs on Friday. Sentiment was also buoyed by multiple medals won by Japanese athletes over the past few days at the Tokyo Olympics, which began last week, brokers said.
But they gave up some gains later in the morning after the Nikkei topped the 28,000 psychological threshold.
"The market tracked U.S. highs, although gains were capped after data showed that economic activity in Japan's private sector was weak," said Koichi Fujishiro, a senior economist at the Dai-ichi Life Research Institute.
The release earlier Monday of preliminary data for Japan's purchasing managers' index by global research firm IHS Markit and au Jibun Bank Flash Japan showed its business activity index dropped to 46.4 in July from 48.0 in June, the sharpest fall since February due to the rapid rise in coronavirus cases in the country.
Investors are also awaiting the results of the two-day U.S. Federal Reserve meeting to end on Wednesday to gauge the timing of stimulus tapering amid waning vaccination rollouts in the United States and concerns regarding the Delta coronavirus variant, Fujishiro added.
On the First Section, advancing issues outnumbered decliners 1,887 to 235, while 68 ended the morning unchanged.
Chip-related issues were boosted by gains in the Nasdaq index on Friday, with Tokyo Electron rising 740 yen, or 1.7 percent, to 45,540 yen, Sumco gaining 77 yen, or 3.0 percent, to 2,650 yen, and Screen Holdings advancing 230 yen, or 2.5 percent, to 9,600 yen.
Tokyo Steel Manufacturing climbed 105 yen, or 9.8 percent, to 1,175 yen, after the firm said Wednesday it revised upward its operating profit outlook to 10 billion yen ($90.6 million) for the April-September business period from an earlier projected 6 billion yen.
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