The Nikkei surged in morning trading on the Tokyo Stock Exchange on the 20th, at one point widening its gain to more than ¥900. The rebound from the decline through the previous day and the U.S. Treasury Department's announcement that it would increase the cap on long-term Treasury buybacks were cited as factors behind the rise.
The Nikkei Stock Average surged in the Tokyo market on the morning of the 20th, at one point rising by more than ¥900. Buying of stocks seen as relatively undervalued spread as investors reacted to the market's decline of approximately ¥3,900 over the two previous days. Lower long-term interest rates also supported investor sentiment.
As of 11:00 a.m., the Nikkei was up ¥675.71 from the previous day's close at ¥66,002.13, while the TOPIX was up 39.58 points at 4,051.89. At the end of morning trading, the Nikkei had settled at ¥65,982.49, up ¥656.07, while the TOPIX stood at 4,048.72, up 36.41 points.
The move was driven in part by developments in the U.S. Treasury market. Long-term U.S. Treasury yields fell after the U.S. Treasury Department increased the cap on its long-term Treasury buybacks. The resulting trend spread to the Japanese market, helping to ease concerns that equities were relatively expensive and improving investor sentiment.
Meanwhile, profit-taking emerged in some high-priced AI and semiconductor stocks, at times narrowing the Nikkei's gains. Funds were also seen moving into relatively undervalued stocks that had lagged the market. The impact of long-term interest-rate trends and U.S. economic indicators on the market's subsequent direction is drawing attention.