Tokyo's Nikkei opens more than 2% up as US votes

·2-min read
The Tokyo market may react heavily to election-related headlines that heavily influence algorithm trading
The Tokyo market may react heavily to election-related headlines that heavily influence algorithm trading

Tokyo's key Nikkei 225 index opened more than two percent higher on Wednesday, tracking rises on US markets a day earlier, as polls began closing in the US presidential vote.

The benchmark Nikkei 225 index was up 2.01 percent or 468.27 points at 23,763.75 in early trade, while the broader Topix index gained 1.50 percent or 24.08 points to 1,632.03.

The robust open of the Tokyo bourse came as early polls closed in the US election, where former vice president Joe Biden is challenging President Donald Trump.

US shares surged overnight, with the Dow ending 2.1 percent higher, the Nasdaq adding 1.9 percent and the S&P up 1.8 percent.

"Tokyo shares are expected to show a technical rebound on the back of gains on Wall Street overnight," Okasan Online Securities said in a note.

"Japanese shares are likely to enjoy a further push as hopes surge for further stimulus in the United States after the presidential election."

The Tokyo market may react heavily to election-related headlines that heavily influence algorithm trading, the brokerage added.

"The Japanese market will have no choice other than to react to the blow-by-blow accounting of ballot tallies in the US presidential election."

The Tokyo market often serves as a bellwether of sorts for global markets following major events, such as presidential elections and referendums like the Brexit vote.

Tokyo Stock Exchange operates while US and European markets close and is the first major market to open after New York finishes.

"While watching the election results, today's Japanese shares may become volatile," Rakuten Securities said in a note to clients.

The dollar stood at 104.50 yen, nearly flat from 104.52 in New York Tuesday.

Among major shares in Tokyo, Toyota rose 1.08 percent to 7,024 yen, Sony added 0.89 percent to 8,846, and Nippon Steel jumped 3.50 percent to 1,080.5 yen.

Uniqlo-operator Fast Retailing added 2.19 percent to 74,180 yen.

However, SoftBank Group fell 1.75 percent to 6,579 yen, after China's Ant Group postponed its IPO under regulatory pressure. SoftBank is a major shareholder of Alibaba, a parent of Ant Group.

Nintendo fell 1.55 percent to 56,700 yen.

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