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Tokyo stocks advance on Wall Street rally

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Tokyo stocks climbed Friday in response to a Wall Street rally triggered by the conclusion of a massive infrastructure deal in the United States.

The 225-issue Nikkei average rose 190.95 points, or 0.66%, to close at 29,066.18, after inching up 0.34 point Thursday.

The Topix index of all first-section issues ended 15.55 points, or 0.80%, higher at 1,962.65, in a turnaround from a 2.04-point drop the previous day.

The market got off to a strong start, after the three major U.S. market gauges, including the Dow Jones industrial average, rebounded or extended gains in the wake of President Joe Biden’s announcement of a bipartisan agreement on $1.2 trillion infrastructure spending plans.

Following the initial spurt, stocks were hit by some selling to lock in profits, with the Nikkei briefly slipping through the psychologically important threshold of 29,000 in the morning.

In the afternoon, while remaining buoyant the market searched for direction amid a dearth of market-moving events and growing pre-weekend lethargy.

Players took to the sidelines to wait for the release later Friday of the May U.S. personal consumption expenditures price index, which is closely monitored by the Federal Reserve, brokers said.

“Short-term players were actively trading small-cap stocks whereas institutional investors were sitting out,” said Masayuki Otani, chief market analyst at Securities Japan Inc.

An online brokerage house official attributed the market’s top-heaviness to fears over its downside risks that have heightened since a plunge earlier this week.

But stocks were underpinned by unabated buying on the back of waning concerns over the Fed’s early tightening shift, another broker said.

On the TSE first section, gainers outnumbered decliners 1,595 to 504 while 94 issues were unchanged. Volume grew to 904 million shares from Thursday’s 842 million shares.

Cyclicals got a boost from the U.S. spending deal, with Kobe Steel and Nippon Steel jumping 4.80% and 4.37%, respectively.

Technology shares, such as semiconductor test device-maker Advantest, became broadly higher, after the tech-heavy U.S. Nasdaq composite index rewrote its record high for the third straight day Thursday.

Panasonic shot up 4.93 % on selective buying sparked by media reports that the firm has sold its entire stake in U.S. electric carmaker Tesla Inc.

Other winners included automaker Mazda and cosmetics maker Shiseido.

On the other hand, Eisai tumbled 3.96% after U.S. rival Eli Lilly & Co.’s Alzheimer’s drug received the U.S. Food and Drug Administration’s breakthrough therapy designation.

Mitsui O.S.K. Lines and other shipping firms also succumbed to selling pressure.

In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average gained 240 points to end at 29,040.

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