December 6, 2023

(Bloomberg) — Japan’s Nikkei 225 stock average erased earlier gains, with the blue-chip gauge briefly surpassing its June intraday peak to reach the highest level in 33 years.

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

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

Chief global strategist Hirokazu Kabeya said traders were in a wait-and-see mood given holidays in both Japan and the US at the end of the week, and tech stocks were likely to get a boost from Nvidia Corp’s earnings on Tuesday. Daiwa Securities Co. lacks positive news to push Nikkei to 34,000, he said.

Stocks that led early gains on Monday included Tokio Marine Holdings Inc., which announced strong earnings and share buybacks, and Panasonic Holdings Corp., which is considering listing its auto-related business.

The Nikkei gained for a third straight week on Friday, its longest winning streak since June. Soft US inflation data provided an additional push, reinforcing the Fed’s view that the Fed’s aggressive tightening has ended.

“The structural undercurrent in the Japanese economy continues to seep through to Japanese equities, which are now getting some help from the market on expectations that the Fed rate hike cycle will end,” said Charu Chanana, market strategist at Saxo Markets. “A strong domestic earnings season has been the icing on the cake.”

–With assistance from Akemi Terukina.

(Adds latest moves in Nikkei)

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