The Nikkei share average ended at a 21-month high on Thursday, led by exporters and financial stocks, as the new Japanese prime minister’s vow to battle deflation and a strong currency buoyed investor risk appetite.
The Nikkei advanced 0.9% to 10,322.98, rising for the third consecutive session and taking the index deeper into “overbought” territory, with its 14-day relative strength index at 77.7, far above 70 which is considered overbought and often indicates an imminent pullback.
The benchmark has advanced 19.2% over the past six weeks, taking the year-to-date increase for the Nikkei to 22.1%, outpacing a 12.9% rise in the US S&P 500 and a 14.7% gain in the pan-European Stoxx Europe 600. It is on track to log its best yearly gain since 2005.
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