Nikkei moves closer to 21-year high; Kobe Steel plunges

TOKYO: Japan's Nikkei share average moved closer to a 21-year high on Tuesday after a three-day weekend as expectations for continued strength in the US economy supported sentiment, but Kobe Steel's shares plunged when it said it had fabricated data.

The Nikkei rose 0.6 per cent to 20,823.51 after hitting a fresh two-year high of 20,823.66 and moving closer to a 21-year pinnacle. A move above the 20,952.71 level hit in June 2015 would mark its highest level since 1996.

Investors returned from Japan's national holiday on Monday to see the yen had weakened over the weekend as strong US wage data was seen as a sign of potentially rising inflation, hinting at Federal Reserve rate hikes and a strengthening dollar.

"The market expects a December rate hike, and the Nikkei has been stabilised as the dollar-yen remains strong," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

Kobe Steel, Japan's third-biggest steelmaker, nosedived after revealed it had fabricated data to falsely show its products met customer specifications.

The company said on Sunday that about 4 per cent of the aluminium and copper products it shipped from September 2016 to August 2017 were falsely labelled as meeting customer specifications.

Exporters were steady after the dollar popped up to a near three-month high of 113.440 on Friday thanks to robust US wages data before pulling back on North Korea concerns. It was flat at 112.690 yen during Asian trading hours.

Toyota Motor Corp gained 1.6 per cent while Mitsubishi Motors and Tokyo Electron both rose 1.9 per cent.

Seven & i Holdings advanced 2.5 per cent after the Nikkei business daily said that the convenience store operator was likely to post 6 per cent growth in operating profit for the March-August period.

Insurance stocks lost ground, with MS&AD Holdings tumbling 3.9 per cent and Sompo Holdings diving 4.7 per cent.