Nikkei Ends At 5-Month High Despite Typhoon

October 15, 2019 – Tokyo stocks rose today with the Nikkei ending at its highest in more than five months on expected high construction demand in the wake of a typhoon that hit Japan over the weekend, and supported by last week’s U.S.-China partial trade deal.

The 225-issue Nikkei Stock Average ended up 408.34 points, or 1.87 percent, from Friday at 22,207.21. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 24.93 points, or 1.56 percent, higher at 1,620.20. Japanese financial markets were closed on Monday for a national holiday.

Almost all industrial categories advanced, with gainers led by marine transportation, pharmaceutical and construction issues.

Despite Typhoon Hagibis killing more than 60 people and flooding buildings and infrastructure in affected areas during the three-day weekend, the Nikkei ended at its highest since April 26 as expectations grew for large-scale reconstruction work, brokers said.

“The market had the whole of Monday to gauge the impact of the disaster, and bet on rise in related demands rather than selling on the damage done,” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

House builder Sekisui House surged 81.0 yen, or 3.7 percent, to 2,284.5 yen, major general contractor Obayashi gained 30 yen, or 2.9 percent, to 1,076 yen, while construction- and auto-use glass maker Nippon Sheet Glass climbed 14 yen, or 2.1 percent, to 669 yen.

“Investors should continue to watch out for the scars of the typhoon, however, as they may weigh on some manufacturing sectors, as damage done to facilities may become clearer,” said Maki Sawada, vice president of the investment research and investor services department at Nomura Securities Co.

The partial U.S.-China deal included expansion of Beijing’s purchases of U.S. farm products, while Washington put aside a planned tariff hike on $250 billion of Chinese goods, easing concerns about an escalation of tension between the two sides.

Exporters with heavy exposure to the Chinese market gained ground, with motorcycle manufacturer Yamaha Motor extending 89 yen, or 4.5 percent, to 2,081 yen, chip-related chemical firm Tokuyama advancing 100 yen, or 3.8 percent, to 2,715 yen, and industrial robot maker Yaskawa Electric soaring 130 yen, or 3.4 percent, to 3,940 yen.

On the First Section, advancing issues outnumbered decliners 1,898 to 214, while 42 ended unchanged.

Ceramic electronic component supplier Taiyo Yuden slid 43 yen, or 1.6 percent, to 2,727 yen after its factory in Fukushima Prefecture in northeastern Japan was temporarily taken out of service due to a flood caused by Hagibis.

Trading volume on the main section rose to 1,284.08 million shares from Friday’s 1,197.14 million shares.