Japan’s Topix index closed at a 33-year high on Tuesday after companies gave strong forecasts during the earnings season, with chip-related stocks tracking overnight gains on the Nasdaq.

Tokyo Stock Exchange’s broader Topix index rose 0.58% to close at 2,127.18, its highest close since August 1990.

The Nikkei share average extended gains, jumping 0.73% to 29,842,99, its highest close since Nov. 2021.

“Investors, both at home and abroad, have taken a fresh look at Japanese stocks as overall their outlook was strong, while companies are trying to improve indicators of their stocks, such as PBR (price book ratio),” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

“In addition, the fundamentals of the Japanese economy is strong, with demand for reopening after the pandemic. Japanese politics is also stable and the Bank of Japan (BOJ) is keeping the ultra-low policy.”

Heavyweight chip-related shares tracked a surge in U.S. semiconductor shares, which boosted the Nasdaq.

The S&P 500 and the Dow ended with modest gains on Monday, while the Nasdaq rose 0.66%.

Chip-making equipment makers led gains in Japanese markets, with Tokyo Electron rising 4.23% and chip-testing equipment manufacturer Advantest jumping 5.52%.

Recruit Holdings rose 3.46%, boosting the Topix even after the staffing agency posted a decline in its annual profit.

The utility sector rose 1.46% to become the top gainer among the Tokyo Stock Exchange’s 33 industry sub-indexes. Drug makers rose 1.28%.

Rakuten Group Inc fell 5.13%, extending the previous day’s sharp slide after Reuters reported the company would issue new shares to shore up its finances after years of losses from its mobile business. 

Reuters