TOKYO -- The Nikkei Stock Average rose to its highest point since early February on Friday, as a weaker yen helped drive the Japanese benchmark index past a long-standing resistance level at 23,000.
The benchmark index ended the day up 1.2% at 23,094.67, not far off the intraday high, after a rally in the afternoon. Companies that had previously suffered sell-offs amid concerns over the trade friction between the U.S. and China were among the biggest winners. Robot maker Yaskawa Electric climbed as much as 9% at one point, while silicon-wafer supplier Sumco closed more than 6% higher.
The gains are partly attributable to a decline in the yen against the dollar, spurred by the Turkish central bank's move Thursday to raise interest rates sharply to stabilize the plunging lira. A strong showing by U.S. stocks helped lift Japanese equities as well.
The bullish mood in the Japanese market, even as the trade war and slumping emerging-market currencies fuel uncertainty abroad, owes to the continued strength of the American and Japanese economies.
Japanese private-sector machinery orders, seen as a leading indicator of capital spending, grew 11% between June and July, government data released Thursday shows. Stocks are looking cheaper as well, thanks in part to strong corporate earnings, with the forward price-earnings ratio for the Tokyo Stock Exchange's first section falling below 15 to near a year-to-date low.
Though overseas investors have remained net sellers of Japanese equities, selling 528 billion yen ($4.72 billion) more than they purchased in the week through Sept. 7, signs of a pivot to buying are starting to crop up.
A catalyst is needed to draw foreign investors back to the market, said Frank Benzimra, head of Asia equity strategy at Societe Generale. A victory for Prime Minister Shinzo Abe in next Thursday's Liberal Democratic Party leadership election could do the trick by reassuring investors that policy will continue on its current track.
Many observers also expect fiscal stimulus to shore up the economy in preparation for a planned consumption tax hike in October 2019.
Since plunging in February in response to a rate hike by the U.S. Federal Reserve, the Nikkei average had tested 23,000 on other occasions but failed to remain above that point for long.
But with the support level edging higher, the index "could head toward the year-to-date high [of 24,124] from January toward the end of the year," said Kiyoshi Ishigane of Mitsubishi UFJ Kokusai Asset Management.