Pedestrians on a Tokyo street pass an electronic board showing stock market movement after indices reached new record highs on Monday.

The Nikkei index extended last week’s gains and closed at a record high on Monday, helped by a weaker yen that lifted automakers’ shares.

The Nikkei rose 0.77% to 43,714.31 points, while the broader Topix index climbed 0.43% to 3,120.96 points. Both indexes closed at session records for the second consecutive day.

Japanese stocks have risen this month thanks to renewed optimism about domestic companies and economic growth, and clearer effects of U.S. tariffs. Seichi Suzuki, chief equity markets analyst at Tokai Tokyo Laboratory Research, said: “Domestic stocks have maintained the momentum they gained last week. There was an expectation that foreign investors would continue buying Japanese stocks.”

Fast Retailing shares rose 1.28%, supporting the Nikkei. Advantest, the chip-testing equipment maker, reversed earlier losses to close up 1.48%. Automakers gained, with Toyota Motor and Honda Motor rising 1.72% and 1.56% respectively, as the yen fell about 0.2% against the dollar on Monday.

A weaker Japanese currency tends to support exporters’ stocks by increasing the value of overseas profits when repatriated to yen. Japanese stocks were also supported after the Dow Jones hit a record during trading on Friday, with UnitedHealth shares jumping after Berkshire Hathaway raised its stake.

In Tokyo, bank shares fell, causing the banks subindex to drop 1.93%, the biggest loser among Tokyo Stock Exchange sector subindices. Mitsubishi UFJ Financial Group lost 2.55% and Sumitomo Mitsui Financial dropped 2.3%. Bank shares had risen on Friday after unexpectedly strong economic data, which had raised expectations of a Bank of Japan rate hike.

Tokyo Electron, the chip equipment maker, lost 2.14%, recording the largest decline on the Nikkei, while Sony Group fell 2.54%. Of more than 1,600 stocks traded on the main Tokyo market, 69% rose, 27% fell and 2% were unchanged.

Rise in bond yields

Japanese government bonds fell on Monday, pushing yields higher, mirroring recent moves in U.S. Treasury yields as investors await a 20-year bond auction in the next session.

The 20-year JGB yield rose 1.5 basis points to 2.575%, its highest level since July 24. The 10-year yield increased 1.5 basis points to 1.575%, its highest since July 28.

The 30-year JGB yield rose two basis points to 3.115%, and the 5-year yield rose one basis point to 1.12%. Yields move inversely to bond prices.

Kisuke Tsuruta, chief fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities, said market participants are studying the rise in U.S. Treasury yields since Friday and are cautious ahead of Tuesday’s 20-year JGB auction. He said the 20-year auction is likely to see relatively strong demand given the attractive yield level, with the gap between 10-year and 20-year yields hovering around 100 basis points. He added that demand from pension funds seeking to rebalance portfolios after the rise in Japanese stocks should support the auction.