By Kevin Buckland
TOKYO Japan's Nikkei share average rallied on Friday to the highest since August 1990, the country's so-called "bubble" era, driven by a confluence of positive factors from strong earnings to optimism over a U.S. debt ceiling deal.
The benchmark index jumped as high as 30,924.57 shortly after the open, on course for a seventh straight winning session, after smashing through the psychological 30,000 level on Wednesday for the first time in 20 months.
The broader Topix, which had reached the post-bubble milestone on Tuesday, extended its climb to as high as 2,171.37.
Japan's stock rally has been powered by a string of strong corporate results, a weaker yen amid views that the Bank of Japan will keep stimulus for longer and an economy that is starting to show signs of a post-COVID consumption revival. Foreign buying thanks to increased investment by Warren Buffett and a push for better corporate governance by the Tokyo Stock Exchange also provided some impetus.
The Nikkei's final push to a 33-year peak drew additional momentum from gains in global stocks, as investors turned more optimistic that U.S. lawmakers can soon reach a deal to raise the debt ceiling and avert a potentially catastrophic default.
The Nikkei had rocketed 6.2% from the May 10 close - when sweeping rally began - to reach Friday's high. It was last up 0.72% at 30,794.32.
The Topix had gained as much as 4.2% over the same period. It was last 0.24% higher at 2,162.98.
"Investors are going to spend today thinking hard about whether this Nikkei rally will continue," said Kazuo Kamitami, an equity strategist at Nomura Securities. "The word 'overheated' is going to be very much front of mind."
A case in point was chip-related shares.
They had started the session very strongly amid a rally in U.S. peers overnight, but then went on to erase those gains or even turn sharply lower.
Chip-testing equipment maker Advantest climbed 3.35% at the open to hit a new record high, and was last down 2.79% to lead Nikkei decliners.
Chip making equipment giant Tokyo Electron, which started the day with a 3% jump to an 11-month peak, pared those gains to 0.38% and at one point briefly turned negative.
Ricoh led Nikkei gainers with a 6.65% jump after announcing it was considering joining forces with a Toshiba unit to develop and manufacture copiers and printers.
Among the Tokyo Stock Exchange's 33 industry sectors, services led with a 1.46% rise, followed by precision machinery and machinery with gains of about 1% each.
(Reporting by Kevin Buckland; Editing by Himani Sarkar and Shri Navaratnam)
