Tokyo shares close higher on US debt ceiling hopes

TOKYO (AFP): Tokyo shares closed higher on Tuesday, following Wall Street’s lead on growing hopes that the United States will avoid a default.

The Nikkei 225 index rose 0.73 percent, or 216.65 points, to end at 29,842.99, while the broader Topix index added 0.58 percent, or 12.33 points, to 2,127.18.

“In the US, the three major indexes all rebounded as caution over the debt ceiling issue eased and buying was particularly strong in chip-related companies, which led to large gains by Japanese semiconductors,” Iwai Cosmo Securities said in a note.

The dollar stood at 136.00 yen, staying firm and little changed from 136.10 yen in New York.

US President Joe Biden has voiced optimism on reaching an agreement, though Republican House Speaker Kevin McCarthy said he thinks they remain “far apart”. US Treasury Secretary Janet Yellen reiterated that the government could run out of cash as soon as June 1.
McCarthy said this weekend would be key, though Biden is slated to travel to Japan for the G7 summit before visiting Papua New Guinea and Australia.
“It has been reported that Biden will want significant progress made in the debt limit talks before he leaves to avoid criticism of him travelling ahead of a potential debt limit breach,” said Tapas Strickland of National Australia Bank.
Participants will also digest fresh US retail sales data due later in the day.
Among major Tokyo shares, semiconductor firms were higher, with Advantest soaring 5.51 percent to 12,810 yen and Tokyo Electron jumping 4.23 percent to 16,860 yen.
SoftBank Group climbed 0.98 percent to 4,999 yen while Uniqlo operator Fast Retailing gained 1.00 percent to 32,270 yen.