TOKYO: Tokyo’s benchmark stock index hit a fresh 21-year high Friday on the back of upbeat Japanese corporate earnings, but Kobe Steel plunged again on a widening quality control scandal.
The Nikkei 225 rose 0.96 percent, or 200.46 points, to close at 21,155.18, the highest level since November 1996 and its ninth consecutive positive session. The index jumped 2.24 percent over the week.
The broader Topix index was up 0.50 percent or 8.49 points, at 1,708.62, logging a weekly gain of 1.27 percent.
A robust US economy has been the main driver for the Japanese stock market but investors are also growing more confident about the prospects for domestic growth, Okasan Online Securities said.
“When the domestic economy is good, expectations grow for stocks sensitive to domestic demand, especially the retail sector,” it said in a commentary.
Japan’s latest corporate earnings season is also getting off to a good start.
Fast Retailing, a market heavyweight, jumped 5.50 percent to 36,770 yen after the Uniqlo operator said Thursday that annual net profit more than doubled from a year ago to a record high thanks to strong sales and as a cheaper yen inflated profits.
Supermarket and convenience store operator Seven & i Holdings rose 2.77 percent to 4,550 yen after it reported better-than-expected operating profit for the second quarter.
“We’re at a delicate level,” Shoichi Arisawa, an analyst with Iwai Cosmo Securities, told Bloomberg News.
“There’s wariness over the speed of recent stock-price gains.
But “fundamentally, there’s nothing bad at all. Considering how positive corporate earnings will be, valuations don’t feel expensive,” he added.
Kobe Steel dived 8.73 percent to 805 yen, losing more than 40 percent since the start of the week after it admitted falsifying strength and quality data for an array of products.
The fresh plunge came after a report that its widening quality scandal has spread to more than 30 foreign customers, including Boeing, General Motors, and French automaker PSA, in addition to wide sections of Japan Inc.
Affected Japanese automakers were lower with Toyota down 0.40 percent at 6,897 yen and Nissan off 0.41 percent to end at 1,085 yen.
On currency markets, the dollar weakened to 112.10 yen, against 112.29 yen in New York late Thursday.
