Tokyo stocks close higher on hopes for new vaccine

Shanghai markets
Shanghai markets
owngarden/getty

Tokyo stocks closed higher on Tuesday following overnight global rallies fuelled by the announcement of a second promising coronavirus vaccine candidate as major cities face new waves of infections.

The benchmark Nikkei 225 index added 0.42%, or 107.69 points, to 26 014.62, while the broader Topix index gained 0.16%, or 2.85 points, to 1 734.66.

"The Tokyo market took over buying sentiment from overseas," said Yoshihiro Okumura, general manager at Chibagin Asset Management.

"Investors simply reacted to positive news about the vaccine," Okumura told AFP.

On Monday, stock markets climbed worldwide after US biotech firm Moderna announced its experimental vaccine against Covid-19 was almost 95% effective - marking a second major breakthrough in the quest to end the pandemic following a similar announcement by Pfizer last week.

The news brightened investor spirits, putting the Nikkei index around its highest point in nearly three decades.

Technical charts continue to show the strength of the market, but some signs of possible overheating have also been seen following recent rallies, brokers said.

"In the short run, it is conceivable that we could see an adjustment at any time," Okasan Online Securities said in a note.

The dollar stood at ¥104.50 in Asia afternoon trade, edging down from ¥104.56 in New York on Monday.

Among major shares, Japan's leading drugmaker Takeda Pharmaceutical rose 1.12% to ¥3 605. The company has agreed to distribute 50 million doses of the Moderna vaccine in Japan, if it is approved.

NTT lost 0.58% to ¥2 468 after the telecom giant said it successfully completed its $40-billion takeover of its mobile unit.

Nissan Motor gained 1.32% to ¥475.2, following a Monday media report that said the firm was reviewing its relationship with partner Mitsubishi. Nissan and Mitsubishi denied the report.

Japan Airlines jumped 3.71% to ¥2 010, while rival ANA Holdings soared 4.16% to ¥2 651.5, after a report that Japan's government could cut taxes on jet fuel to help bolster the battered aviation sector.

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