Japan's Nikkei reclaims 40,000 level on weak yen, foreign buying
Updates with closing levels
By Brigid Riley
TOKYO, July 2 (Reuters) -Japan's Nikkei share average hit the 40,000 level for the first time in three months on Tuesday, buoyed by a weaker yen and foreign fund flows.
The Nikkei .N225 finished 1.12% higher at 40,074.69, reclaiming the psychologically significant 40,000 level for the first time since April 4.
The broader Topix .TOPX closed up 1.15% at 2,846.62, marking its third consecutive session of gains.
Shares of export-related companies rose after the yen slid to its weakest in nearly 38 years on Monday. Toyota Motor 7203.T and Sony Group 6758.T both rose about 1.5%.
The weak yen put the spotlight back on whether the Bank of Japan will hike interest rates later this month to contain the currency's decline, supporting financials. FRX/
Insurance firms .IINSU.T rose 3% and were among the top gainers of the Tokyo Stock Exchange's 33 industry sectors. Banks .IBNKS.T rose 2.1%.
Analysts attributed the Nikkei's rally to foreign fund flows and said focus would be now on whether the index stays above the 40,000 level this month.
"The most important thing is whether we can confirm improvements in corporate earnings this July," said Tatsunori Kawai, chief strategist at Kabucom.
The Nikkei reached an all-time high of 41,087.75 on March 22 before retreating the following month. The benchmark index is up 18.4% for the year so far.
Among individual stocks, Uniqlo parent Fast Retailing 9983.T climbed 2.1% to give the Nikkei the largest boost, followed by chip-making equipment giant Tokyo Electron 8035.T, which rose 0.7%.
Kawasaki Kisen Kaisha 9107.T, which is mainly engaged in the marine transportation business, surged 8.6% to become the largest gainer on the Nikkei.
Shipping firms .ISHIP.T rose 3.7% to lead sectoral gains.
Reporting by Brigid Riley; Editing by Rashmi Aich and Subhranshu Sahu
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