Nikkei closes above 20,000 for first time in 15 years

TOKYO: Tokyo’s benchmark index closed above 20,000 for the first time in 15 years as hopes for strong Japanese corporate earnings overshadowed a weak lead from Wall Street.

The Nikkei 225 index added 1.13 percent, or 224.81 points, to finish at 20,133.90. It last closed above the psychologically important level in April 2000.

The last time the Nikkei was at that level Sony’s groundbreaking PlayStation 2 was in stores, the Dot-com bubble was collapsing and Bill Clinton still occupied the White House.

The broader Topix index of all first-section shares climbed 0.80 percent, or 12.91 points, to 1,621.79.

Attention now turns to the start of Japanese earnings season with many firms set to report bumper fiscal-year profits.

“Since the Nikkei is a simple average of 225 (companies), what’s behind its rise are expectations for higher corporate earnings,” Toshihiko Matsuno, senior strategist at SMBC Friend Securities, said.

“Where the market will go from here depends on how company earnings fare.”

A weak yen also provided support. The dollar was at 119.64 yen Wednesday, against 119.63 yen in New York and well up from 119.44 yen earlier Tuesday in Tokyo.

A pending trade deal could also push the market higher, he added, as cash from domestic and foreign pension funds flow in.

Tokyo and Washington emerged Tuesday from marathon talks on a Pacific-wide free-trade area saying they were close to an agreement.

Japanese Prime Minister Shinzo Abe is hoping the Trans-Pacific Partnership (TPP) — which includes a dozen nations accounting for about 40 percent of the global economy — will help him push through reforms to the pro- tected agricultural sector, a key element in his bid to stimulate growth at home.

“(The Nikkei) could climb higher if TPP talks reach an accord, sparking hopes for stronger external trade,” said Matsuno at SMBC.

Adding to buying sentiment, Japan on Wednesday posted its first trade surplus in nearly three years in March as lower oil prices reduced import costs and the value of exports to North America soared.

A weak yen also provided support — the dollar was at 119.64 yen Wednesday, against 119.63 yen in New York and well up from 119.44 yen earlier Tuesday in Tokyo.

The Nikkei surged 57 percent in 2013 — its best year in four decades — helped by Abe’s growth blitz, which sharply weakened in the yen in a boost for exporters. And last year it finished just short of its pre-financial crisis high.

The index was below 10,000 when Abe came to power.

In 2000, Japan was about a decade into a long-term economic malaise after the bursting of a property and stock market bubble that had driven the Nikkei to a record high of almost 39,000 in the last days of 1989.

In Wednesday trading, banks led gains, with Japan’s biggest lender Mitsubishi UFJ rising 2.95 percent to 879.2 yen and rival Mizuho Financial Group up 2.51 percent at 232.5 yen.

Kyushu Electric jumped 3.16 percent to 1,272.0 yen after a court in southern Japan rejected a bid by a citizens’ group to halt the restart of two of its nuclear reactors.

Yahoo Japan rose 2.69 percent to 534.0 yen after its US counterpart said it was exploring a possible sale of its stake in the Japanese business.

Since the Nikkei is a simple average of 225 (companies), what’s behind its rise are expectations for higher corporate earnings.

Sony closed 0.14 percent lower at 3,675.5 yen. After markets closed, the firm trimmed its loss forecast for the just-ended fiscal year to 126 billion yen from a previous 170 billion yen due to stronger-than-expected sales.

Car maker Suzuki fell 0.89 percent to 3,790.0 yen after it recalled 1.87 million vehicles in Japan owing to an ignition switch problem.

On Wall Street, the Dow fell 0.47 percent, the S&P 500 slipped 0.15 percent, while the Nasdaq rose 0.39 percent.