The Nikkei continued its strong week during today's (April 3rd) trading session, with the index rising to a new three-week high after another day of gains.
Its progress was not as strong as the 1.5 per cent increase piled up by the index yesterday, but a 0.8 per cent rise was still good enough to prompt speculation better days are ahead for the Nikkei.
It has been a slow start to the new year for the index, which outperformed global rivals such as the Dow Jones and the FTSE 100 last year to increase its value by around 50 per cent.
The Chinese government announced today that taxes for small firms are to be cut, with construction companies seeing their stocks increase as a result of the news. Industrial robot maker Fanuc Corp was up by more than one per cent, while Hitachi Construction Machinery Co was up by 1.2 per cent and Komatsu shares increased by two per cent.
Speaking to Reuters, Takuya Takahashi, a strategist at Daiwa Securities, said: "The (China) announcement is lifting the mood because investment expansion such as infrastructure investment would pave the way for growth in consumption in the future."
Another of the big movers on the Nikkei during today's trading session was Sharp, which was up by over three per cent after it was reported by the index that the company plans to raise China-bound shipments of energy-efficient IGZO liquid crystal display panels. These are used for smartphones and shipments are predicted to be up to five million a month by the end of the year.
Yesterday's strong gains for the Nikkei were mainly down to the large increase in its share price recorded by Renesas Electronics Corp, which rose by almost 20 per cent after media reports claimed iPhone manufacturer Apple is considering buying up a part of its business.
The Nikkei was supported today by a strong night on Wall Street yesterday as well, with the S&P 500 closing at another record high as 2014 continues to be a great year for the index.
Learn about the Asian markets and CFD trading at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.