TOKYO – Tokyo stocks ended at record highs Monday, with the Nikkei stock index closing above 69,000 for the first time after briefly surging over 5 percent, as investor sentiment was lifted after both the United States and Iran said they have agreed on a memorandum of understanding to end their war.
The 225-issue Nikkei Stock Average ended up 3,297.46 points, the second largest rise on a closing basis, or 4.99 percent, from Friday at 69,317.50.
The index extended gains briefly to 3,662.19 points, the biggest-ever gain during trading, to an intraday high of 69,682.23.
The broader Topix index finished 117.64 points, or 3.03 percent, higher at 3,999.60, also marking an intraday high of 4,032.39.
On the top-tier Prime Market, the main gainers were air transportation, metal product and construction issues.
The U.S. dollar traded around the 160 yen line in Tokyo as market players remained cautious ahead of policy meetings by both the Bank of Japan and the U.S. Federal Reserve.
At 5 p.m., the dollar fetched 160.12-13 yen compared with 160.15-25 yen in New York and 160.27-29 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.1605-1607 and 185.83-87 yen against $1.1560-1570 and 185.28-38 yen in New York and $1.1567-1568 and 185.39-43 yen in Tokyo late Friday afternoon.
The yield on the benchmark 10-year Japanese government bond was down 0.060 percentage point from Friday’s close at 2.575 percent, on expectation that inflation will ease following the U.S.-Iran announc
Stocks rose sharply from the outset after U.S. President Donald Trump said in a social media post before the market opened that a deal over the Middle East crisis had been completed, which Iran later acknowledged.
Surging crude oil prices had been seen as weighing on the Tokyo stock market, but they were expected to ease following the reopening of the Strait of Hormuz. Benchmark West Texas Intermediate crude oil futures have already fallen to around $80 per barrel.
Heavyweight technology shares performed well, supported by rises in their U.S. counterparts late last week as SpaceX made a solid debut on the Nasdaq stock exchange.
Meanwhile, gains were trimmed in the afternoon as some investors locked in gains and stayed on the sidelines ahead of the outcome of the BOJ’s policy meeting on Tuesday and a subsequent press conference by Deputy Governor Shinichi Uchida.
“Nobody had expected such a surge,” said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., adding that “a wait-and-see mood prevailed in the afternoon.”
“As the situation has gone through twists and turns, we definitely have to continue paying attention to developments in the Middle East situation until an agreement is signed on June 19,” said Wataru Akiyama, strategist in the Investment Content Department of Nomura Securities Co.