Japan shares end at 30-yr peak as global reflation trade ignites rally

By Stanley White
TOKYO, Jan 8 (Reuters) - Japanese stocks surged on Friday to
close at a 30-year high as expectations of more U.S. fiscal
stimulus and rising bond yields set off a cascade of bets that
global inflation will accelerate.
The Nikkei 225 Index .N225 ended 2.36% firmer at
28,139.03, closing at the highest since August 1990, with raw
materials and technology shares leading the gains.
The broader Topix .TOPX rose 1.57% to 1,854.94 to close at
its highest since February 2018.
Global equities got a major boost after incoming U.S.
President Joe Biden's Democrats won control of the Senate that
clears the path for his government to use big fiscal spending to
stimulate the pandemic-ravaged economy. The tech sector outlook has brightened after semiconductor
makers Samsung Electronics Co Ltd 005930.KS and Micron
Technology Inc MU.O forecast robust profit and revenue.

"We should expect more fiscal spending and more deficits
under Biden," said Masayuki Kichikawa, chief macro strategist at
Sumitomo Mitsui Asset Management Co.
"We have a reflationary trade, because we have a weak
dollar, stronger equities, higher long-term yields, and higher
commodity prices."
The stocks that gained the most among the top 30 core Topix
names were Murata Manufacturing Co Ltd 6981.T , up 5.04%,
followed by Daikin Industries Ltd 6367.T that rose 3.81%.
The Topix index for electric machinery makers .IELEC.T ,
which includes many semiconductor-related shares, rose 2.71% to
the highest since March 2000.
The underperformers among the Topix 30 were Hoya Corp
7741.T , down 1.79%, followed by Central Japan Railway Co
9022.T losing 0.14%.
The Nikkei average in dollar-denominated terms smashed
through its peak during the 1989 bubble economy to rise to a
record. There were 193 advancers in the Nikkei index against 29
decliners.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 1.15 billion, compared with the average
of 1.19 billion in the past 30 days.