Business

Japan's Nikkei at post-quake high on recovery hopes

Nikkei 225 Index

Last Updated at 22 Sep 2017, 06:45 GMT Nikkei 225 three month chart
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Japanese shares hit a post-quake high as the Nikkei Index rose for the seventh successive day.

The Nikkei 225 index rose 1.1% to close at 10,082.48 points, the highest level post the 11 March earthquake and tsunami.

The disasters saw Japanese stocks plunge on concerns that profits at the country's firms will be hit.

However, investors have been optimistic that companies are recovering faster than expected.

Markets were also buoyed by the news that Japan's government had approved a second emergency budget of 2tn yen ($24.7bn; £15.4bn) for reconstruction.

"It's becoming clear that Japanese companies are recovering much faster than expected from supply chain disruptions," said Toshiyuki Kanayama of Monex Securities.

Time to buy?

As the quake and tsunami disrupted Japan's supply chain, some of the biggest Japanese companies were forced to suspend or curb production due to a shortage of parts.

As a result, stocks of these companies plummeted in the aftermath of the twin disasters.

However, as Japan's supply chain issues are resolved and the companies get back on track, analysts suggest that foreign investors have a renewed interest in big Japanese companies.

"European investors are said to be buying large-cap shares at the core of the Topix, which is leading to the view that some foreign investors are re-evaluating Japanese shares," said Masato Futoi of Tokai Tokyo Securities.