Japan’s Nikkei rose on Monday morning, hovering at 10-1/2-month highs after the yen weakened further, but the gains could be limited on investor caution after the market’s recent sharp rally.

The Nikkei share average rose 0.6 per cent to 18,072.01 in mid-morning trade, to its highest since January 7.

The Nikkei has gained more than 11 per cent since Donald Trump’s victory in the US presidential election on November 8, as investors believe that his administration would embark on expansionary fiscal policies and boost growth.

In early Asian trade, the dollar rose to 111.125 yen, its highest since May 31.

“As long as the dollar stands tall against the yen, Japanese stocks will likely be helped. But once Trump mentions protectionism on trade, investors who have been cautious against the recent rally are expected to take profits,” said Kazuhiro Takahashi, an equity strategist at Daiwa Securities.

Exporters were steady, with Toyota Motor Corp gaining 0.7 per cent, Panasonic Corp advancing 1.2 per cent and Canon Inc rising 1.0 per cent.

Mining stocks were in demand after oil prices rose around 1 per cent as producer cartel OPEC moved closer to an output cut to rein in oversupply that has kept prices low for over two years.

Inpex Corp surged 2.9 per cent and Japan Petroleum Exploration Co soared 2.2 per cent.

The broader Topix gained 0.8 per cent to 1,439.60 and the JPX-Nikkei Index 400 added 0.7 per cent to 12,913.37.

Related Topics