TOKYO: Japan’s key Nikkei 225 stock average neared 40,000 to post a fresh record high Friday, following an overnight surge of U.S. technology issues.

The Nikkei average scaled 744.63 points, or 1.90%, to finish at 39,910.82, the highest closing ever. It rose for the first time in three days.

Investors were heartened by the climbs Thursday of U.S. semiconductor-related and other tech stocks, which attracted buying as inflation concerns retreated following the release of the U.S. personal consumption expenditures price index for January the same day. The PCE price index rose 2.4% year on year, but the growth decelerated for the fourth straight month.

Japanese stocks’ gains on the Tokyo market were led by chip issues such as Tokyo Electron, which went up 4.10%.

Meanwhile, exporters were aided by the weakening of the yen against the dollar reflecting Bank of Japan Governor Kazuo Ueda’s remarks that Japan has yet to achieve the central bank’s 2% inflation target sustainably and stably.

“The Tokyo market saw renewed buying by foreign investors seeking to increase their exposure to Japanese stocks following the turn of the month,” an official at a major securities firm said.

The Nikkei rose to as high as 39,990.23 in late trading before narrowing its gains toward the close.

An official at a midsize securities firm said that “the pace of the Nikkei’s ascent is a little too fast.”

Buying was “unbalanced,” a major securities firm official said, noting that investor appetite concentrated on large-capitalization issues.

On the Prime top-tier section of the Tokyo Stock Exchange, rising and declining issues totaled 805 each, while 47 issues were unchanged.

Volume slid to 1,790 million shares from Thursday’s 2,365 million shares.

In addition to chip stocks, oil-related names attracted hefty buying, with Idemitsu rising 3.89% and Inpex climbing 2.83%.

Other major winners included shipping firm Kawasaki Kisen, up 8.32%.

JIJI Press