TOKYO: Japanese shares rose on Wednesday after positive data on the US manufacturing sector spurred hopes of a global economic recovery remains on track to bounce back from the COVID-19 pandemic.

Stocks also got a boost after Chief Cabinet Secretary Yoshihide Suga emerged as the leading candidate to replace outgoing Prime Minister Shinzo Abe at a leadership election expected this month.

If Suga becomes the new prime minister, this would suggest few major changes to economic policy and lesser chances of political instability, which are positives for equities, analysts said.

The Nikkei 225 Index rose 0.31% to 23,209.27 by 0204 GMT, while the broader Topix index was up 0.2% at 1,619.05.

The stocks that gained the most among the top 30 core Topix names were electronic parts maker Murata Manufacturing Co Ltd up 2.68%, followed by industrial robot maker Fanuc Corp gaining 2.49%.

Japan’s capital goods sector got a boost after the Institute for Supply Management said on Tuesday that US manufacturing activity accelerated to a nearly two-year high in August.

The underperformers among the Topix 30 were drugmaker Astellas Pharma Inc down 2.07%, followed by mobile carrier KDDI Corp losing 1.15%.

There were 82 advancers on the Nikkei index against 136 decliners.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 0.43 billion, compared to the average of 1.16 billion in the past 30 days.

Reuters