Japanese stocks climbed to near their highest in a month on Tuesday with all sectors rising after Wall Street soared overnight. Financial stocks outperformed in line with their US counterparts' sharp gains.
The Nikkei rose 1.0 per cent to 19,742.54 in midmorning trade, after hitting as high as 19,767.65, the highest level since Aug. 16.
The S&P 500 surged more than 1 per cent to a record close on Monday as tropical storm Irma caused less damage in Florida than expected and North Korea held off from testing a missile or nuclear weapon over the weekend, which some had feared.
Insurers, securities brokers and banks , were among the top performers on the board, rising 3.3 per cent, 1.6 per cent and 1.5 per cent, respectively. The insurance sector took cues from the MSCI World's insurer index which soared 1.5 per cent on Monday on expectations insured property losses from Hurricane Irma would be smaller than initially forecast. “Japanese financial stocks joined the global financial rallies as there are many factors which benefit them today," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
Both the 10-year US Treasuries yield and the 10-year cash JGB yield rose, increasing benefiting firms that invest in high-yielding products.
Dai-ichi Life Holdings jumped 3.3 per cent, MS&AD Insurance surged 2.5 per cent, Nomura Holdings gained 1.8 per cent, Mizuho Financial Group added 1.1 per cent while Sumitomo Mitsui Financial Group rose 1.6 per cent. Other winners included bellwether exporters, with Nintendo Co surging 2.5 per cent, Toyota Motor Corp advancing 1.1 per cent and Honda Motor Co gaining 1.8 per cent.
Analysts said that although geopolitical fears for the Korean Peninsula eased for the time being, the market continued to monitor developments carefully.
The United Nations Security Council unanimously stepped up sanctions against North Korea on Monday over the country's sixth and most powerful nuclear test on Sept. 3, imposing a ban on its textile exports and capping imports of crude oil.
The measures were less severe than Washington's initial proposal while the US Ambassador to the United Nations said the United States was not looking for war with North Korea and that Pyongyang had “not yet passed the point of no return.”
The broader Topix added 0.9 per cent to 1,626.08, with all of its 33 subsectors in positive territory.