Tokyo stocks briefly broke above 20,000 for the first time in 15 years in early Friday trading, the latest milestone in the market’s bull run, before sinking on the day, while stocks in Hong Kong extended a six-session winning streak.
In Japan, the Nikkei 225 index had its win streak stopped by losing 30.09 points, or 0.2%, to 19,907.63
In Hong Kong, the Hang Seng index gained another 328 points, or 1.2%, to 27,272.39, as excitement over buying by Chinese investors cooled and was just 0.1% higher.
Tokyo traders say that persistent domestic demand for stocks through systematic futures buying was causing the recent surge, which has now pushed the index up nearly 15% for 2015.
Part of the strength in domestic demand lies in buying from Japanese public pensions and the Bank of Japan. The last time the index passed the 20,000 mark was on April 17, 2000.
The roots of the current Japan stock rally can be traced back to the central bank’s most recent round of quantitative easing on Oct. 31.
Almost simultaneously, the ¥120-trillion Government Pension Investment Fund announced plans to increase its exposure to domestic equities while cutting the number of bonds in its portfolio.
Relative to the size of Japan’s economy, all the new buying was larger than anything attempted by either the U.S. Federal Reserve or the European Central Bank.
The U.S. dollar has been fluctuating between about ¥118.50 and ¥120.50 for much of the last month. It was trading around ¥120.55 early Friday.
In other markets
The Shanghai CSI 300 regained 82.28 points, or 1.9%, to 4,344.42
In Singapore, the Straits Times Index recovered 12.08 points, or 0.4%, to 3,472.38
The Kospi index in Korea gained 28.89 points, or 1.4%, to 2,087.76
In Taiwan, the Taiex index gained 49.66 points, or 0.5%, to 9,617.70
In New Zealand, the NZX 50 eked up 0.19 points to 5,847.36
In Australia, the S&P/ASX 200 faded 28.51 points, or 0.5%, to 5,932.22
