TOKYO, March 8 (Reuters) – Japanese shares rose on Monday as the central bank governor’s remarks eased speculation that yields on government bonds would be allowed to rise, while optimism over a $1.9 trillion U.S. pandemic relief plan also underpinned sentiment.
The Nikkei share average rose 0.66% to 29,050.17 by 0218 GMT, while the broader Topix rose 0.82% to 1,911.68.
Bank of Japan Governor Haruhiko Kuroda said on Friday he saw no need to widen an implicit band set for its long-term interest rate target at a policy review this month, stressing the need to keep borrowing costs low to support a pandemic-ravaged economy.
Kuroda’s remarks are having a strong impact on the stock market, said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities.
“Investors were prepared to sell bonds at a loss and compensate that loss with a gain from selling stocks. But Kuroda’s view has completely changed that direction,” Fujito said.
The rise in Japanese shares also followed the passing of the COVID-19 stimulus bill by the U.S. Senate and a surprisingly strong U.S. payrolls report that augured well for a global economic rebound.
Takeda Pharmaceutical jumped 4.18% after the drugmaker said it had sought approval for the use of Moderna’s COVID-19 vaccine.
Japan’s biggest steelmaker, Nippon Steel Corp, advanced 4.08% after the company said it would further reduce capacity due to falling domestic demand and intensifying competition from China.
Japan’s biggest oil and gas explorer, Inpex, gained 2.5% as oil prices rose to their highest levels in more than a year.
The stocks that gained the most among the top 30 core Topix names were Takeda, followed by Mitsubishi UFJ Financial Group , which rose 3.31%.
The underperformers among the Topix 30 were Nidec Corp , which fell 3.91%, followed by Nintendo, losing 2.74%.
(Reporting by Junko Fujita in Tokyo; Editing by Aditya Soni)