Nikkei hits over 2-year high on Wall Street boost, focus on final US election tally

Japanese shares ended at a more than two-year high on Thursday, buoyed by overnight Wall Street gains, while focus remained on final tally for the US presidential election after several state results gave a narrow lead to Democrat Joe Biden and a likelihood of divided Congress.

The benchmark Nikkei share average rose 1.73% to close at 24,105.28, its highest since Oct. 3, 2018. The broader Topix gained 1.39% to 1,649.9.

Biden predicted a US election win over President Donald Trump after pivotal victories in Michigan and Wisconsin, but the risk of a prolonged contested election remains as Trump’s campaign moved to file lawsuits and request for a recount in many states.

Analysts said stocks were supported by overnight Wall Street gains as the likelihood of gridlock in Congress made investors optimistic that major policy changes would be difficult to enact.

Growth shares performed well, taking positive cues from their US counterparts.

“US growth stocks were buoyed by a drop in US long-term interest rate as investor wariness eased over massive government spending. This helped Japanese growth-oriented stocks to track them higher,” said Takashi Hiroki, chief strategist at Monex Securities.

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The Topix Growth index rose 2.46%, while the Topix Value index inched 0.26% higher.

Banks and insurers were down 1.03% and 1.44%, respectively, as they were hurt by overnight drops in US Treasury yields.

Pharmaceutical firm Eisai jumped 17.91% to hit its daily limit after the company and its partner Biogen Inc moved closer to receiving the US FDA’s nod for their Alzheimer drug.

Subaru Corp rose 0.31%, after the automobile company raised its operating profit outlook as US vehicle sales rebounded more than it expected.

Suzuki Motor climbed 4.89% as its profit forecast was higher than analysts’ expectations.

The Mothers Index of start-up firm shares gained nearly 3.2%, extending its rally from a more than 5% rise.