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Japan shares flirt with 29-year high on vaccine, stimulus hopes

·2-min read

TOKYO, Dec 1 (Reuters) - Japanese shares rose toward a 29-year high on Tuesday, tracking gains in U.S. stock futures on the back of growing optimism that major drugmakers will roll out coronavirus vaccines some time before the end of the year.

The Nikkei 225 index climbed 1.42% to 26,810.05 by 0212 GMT, moving closer toward a 29-year high of 26,830.10 reached on Monday. The broader Topix rose 0.86% to 1,769.91.

Makers of precision equipment, electronic parts, and chemicals led the advance in a sign that investors are betting on cyclical companies with close links to global demand.

Japanese stocks got off to a bright start after Moderna Inc said it had applied for U.S. emergency authorization for its COVID-19 vaccine. Moderna's candidate is the second vaccine likely to win U.S. approval for a potential rollout this year.

In addition, Japan's government has vowed to compile a stimulus package to help the economy mitigate short-term economic impacts from a recent rise in coronavirus infections.

"There may be some slight adjustments, but Japanese stocks won't fall very far," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co.

"Approval of a vaccine is a big boost. Some traders are also focused on an increase in Japanese fiscal spending."

U.S. stock futures rose 0.83% in early Asian trade, which also bolstered Japanese shares.

The stocks that gained the most among the top 30 core Topix names were Shin-Etsu Chemical Co Ltd, up 4.46%, followed by Fanuc Corp, which rose 3.53%.

The underperformers among the Topix 30 were Recruit Holdings Co Ltd, down 2.80%, followed by Nintendo Co Ltd , losing 1.94%.

There were 170 advancers on the Nikkei index against 49 decliners.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.57 billion, compared to the average of 1.27 billion in the past 30 days. (Reporting by Stanley White; Editing by Subhranshu Sahu)