JAPANESE stock prices jumped 7.84 per cent yesterday, shooting the Nikkei 225 average past the 20,000 mark, as investors bid up telecommunications and steel shares likely to benefit from a government package of economic stimulus measures.
The Nikkei surged 1,471.2 points to 20,229.12, its highest closing level since October 25.
Yesterday's rise marks the fourth-largest gain for the Nikkei in percentage terms, behind the 9.3 per cent jump on October 21, 1987.
The broader Topix index of all stocks on the first section of the exchange gained 101.4 points or 6.64 per cent to 1,629.22.
''It's a dramatic statement of confidence that over the next quarter, we'll see some real growth,'' said Robert Owen, manager of international sales at Schroder Securities.
Investors were cheered by weekend news that parliament had approved a compromise version of four political reform bills, clearing the way for the mid-week announcement of a economic spending package.
''It's just about as bullish today as you can get,'' said Chuck Lambert, a senior salesman at Jardine Fleming Securities.