Japan's Nikkei closes at 33-year high; firm Wall Street lifts appetite

TOKYO, June 5 (Reuters) – Japan’s Nikkei share average closed at its highest in 33 years on Monday as gains on Wall Street lifted risk appetite, while investors kept betting on domestic equities on expectations the Bank of Japan would retain its ultra-loose policy.

The Nikkei index (.N225) jumped 2.2% to end at 32,217.43, its highest close since July 1990 and posted its biggest daily gain since Jan. 18.

The broader Topix (.TOPX) advanced 1.7% to 2,219.79.

“The market was supported by the gains in the U.S. market on Friday. That helped keep the money flowing into risk assets in Japan,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

The Japanese equities are in more favorable position than their U.S. peers as the BOJ is expected to maintain ultra low rates. Hence, when U.S. shares rise, there is no reason for not buying Japanese stocks, Kamada added.

The Bank of Japan will hold a two-day policy meeting, starting June 15.

Japanese companies’ ongoing efforts to boost shareholder returns also supported sentiments, Kamada said.

On Friday, U.S. stocks closed higher after a labour market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default.

Among individual stocks in Japan, Uniqlo brand owner Fast Retailing (9983.T) jumped 3.86%. Chip-testing equipment maker Advantest (6857.T) rose 3.38% and robot maker Fanuc (6954.T) advanced 4.53%.

Chip-making equipment makers, which initially tracked declines in the Philadelphia semiconductor index (.SOX), reversed course, with Tokyo Electron (8035.T) and Screen Holdings (7735.T) rising 0.75% and 1.9%.

All but one of the Tokyo Stock Exchange’s 33-sector sub-indexes rose, with machineries (.IMCHN.T) rising 3.12% to lead the gains. Shippers (.ISHIP.T) rose 2.86%.

Utilities (.IEPNG.T) slipped 0.6%. Tokyo Electric Power Holdings (9501.T) lost 3.64% to become the biggest loser on the Nikkei.

Reporting by Junko Fujita; Editing by Janane Venkatraman and Sohini Goswami

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