(Bloomberg) — The Nikkei 225 Stock Average touched a level above 30,000 for the first time since April as a reshuffle of the blue-chip gauge added to a wave of positive sentiment on Japanese equities.

SoftBank Group Corp. and Tokyo Electron Ltd. were the largest contributors to a 1% gain in the Nikkei 225 as of 9:45 a.m. in Tokyo. Electronics makers gave the biggest boost to the broader Topix, which advanced 1.1%. The Nikkei 225 is up 9.1% so far this year, while the Topix has gained 14%.

The revamp of the Nikkei 225 — which will add videogame giant Nintendo Co. and major technology companies Keyence Corp. and Murata Manufacturing Co. — comes amid an upsurge of interest in Japanese equities. The announcement last week that Prime Minister Yoshihide Suga will step down has sparked optimism for new policies to spur the economy.

“In the short term, Japanese stocks may appear overbought, but foreign investors have low weightings in Japan and will continue to buy stocks that have been lagging behind,” said Ryuta Otsuka, a strategist at Toyo Securities Co. While there may be some profit-taking with the Nikkei reaching 30,000, investors will continue to look for thematic plays related to Suga’s succession, he added.

Keyence and Murata jumped more than 5% each on Tuesday, while Nintendo, whose addition to the Nikkei 225 had been widely expected, gained about 2% before paring its advance. Among the stocks being deleted, Nisshinbo Holdings Inc. and Toyo Seikan Group Holdings slid more than 10%, while Sky Perfect JSAT Holdings Inc. fluctuated.

The Nikkei’s latest annual review followed rule changes earlier this year that made it easier for the price-weighted gauge to include shares with high prices. Analysts noted that given the large sizes of the three new additions, the remaining Nikkei stocks may need to be sold down to make room, although this was known well in advance.

“Market participants have been pricing the inclusion changes,” Seiichi Suzuki, a market analyst at Tokai Tokyo Research Institute Co., said after the changes were announced. “It’s possible they will now see the news as being ‘done and dusted’, and it’s possible they’ll buy back the Nikkei 225.”

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Source: Nikkei 225 Touches 30,000 as Reshuffle Extends Japan Stock Gains

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