Strong earnings boost Japanese shares to nearly 2-month high

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Japanese stocks surged to a nearly two-month high on Friday, as upbeat corporate earnings helped the Nikkei benchmark index sthrough the 28,000 psychological barrier.

The Nikkei share average hit 28,167.04, its highest level since June 9, before settling up 0.71% at 28,131.87 by the end of the morning session. The index extended gains to a third straight day and has risen 0.49% so far this week.

The broader Topix index gained 0.68%.

“Overall the earnings results look good, so there’s a sense of relief,” said a domestic securities broker.

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Sentiment was lifted by the rally in Taiwanese stocks, with the TAIEX index climbing 1.8%, and gains in U.S. stock futures, said a market participant at a domestic asset management firm.

Investors had previously expected to see more tentative movements ahead of the release of U.S. employment data due later in the day.

At least 132 of the Nikkei’s constituents climbed, while 87 dropped and six traded flat.

Kikkoman Corp led the gains among Nikkei’s best performers, gaining 9% after the food manufacturer posted a strong earnings report.

Nippon Steel Corp came close with gains of 8.81% after the company forecast a 6% drop in its annual profit, way smaller than analysts had expected.

Clothing manufacturer Fast Retailing gained 1.27% after it floated plans to open its first U.S. store for discount brand GU this autumn.

Bucking the somber mood, entertainment company Konami Group Corp turned to be the worst performer in the Nikkei, losing 4.14% after reporting a fall in profit despite an uptick in its revenue.

Shipbuilder Mitsui E&S Holdings Co Ltd lost 4% following weak quarterly numbers.

(Reporting by Sam Byford and Tokyo markets team; Editing by Sherry Jacob-Phillips)

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