(Corrects paragraph 6 to add the names of the financial sectors)
TOKYO, Sept 6 (Reuters) - Japan’s Topix index rose on Monday to its highest level in more than three decades, while the Nikkei also jumped, as investors continued to buy undervalued stocks on hopes of a swift economic recovery and positive corporate outlook.
The Nikkei share average gained 1.83% to close at 29,659.89, while the broader Topix jumped 1.28% to 2,041.22, its highest close since August 1990.
Japan’s market built on its Friday’s upbeat momentum after Prime Minister Yoshihide Suga offered to resign, raising hopes that the ruling coalition could win an upcoming election and avoid political turmoil.
“Investors are now in the process of adjusting their positions of Japanese stocks, which were underweighed because of the country’s low vaccination rate and resurgence of the COVID-19 infections,” said Soichiro Matsumoto, chief investment officer-Japan at Credit Suisse Private Banking.
“But, the vaccination rate will soon match with that of U.S. and Europe and the higher ratio would drive an economic reopening. Towards the end of the year, we can expect more companies to raise their forecast.”
All but four of the 33 sector sub-indexes on the Tokyo exchange traded higher, with shippers surging 8.49%, while financial sectors for securities brokerages and non-bank financial companies also gained 2.66% and 2.07%, respectively.
Chip-related shares tracked the Nasdaq, which hit its peak on Friday. Tokyo Electron jumped 2.43% and Advantest gained 2.56%.
Phone companies, which were under pressure to cut rates under the Suga administration, also rose, with KDDI jumping 3.64% and Nippon Telegraph and Telephone gaining 3.67%. They were the best performers among the top 30 core Topix names.
The worst performers of the top 30 core Topix names were Central Japan Railway , which lost 0.35%, followed by Seven & i Holdings, falling 0.22%.
Reporting by Junko Fujita; editing by Uttaresh.V and Sherry Jacob-Phillips
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