Tokyo stocks close at nine-month highAgence France-Presse
TOKYO – Tokyo stocks climbed to a nine-month high Wednesday, jumping 1.49 percent as the yen tumbled on speculation over more central bank easing under Japan’s newly installed administration.
The benchmark Nikkei 225 index gained 150.24 points to 10,230.36, the highest level since March 27, while the broader Topix index of all first-section shares was up 1.16 percent, or 9.70 points, at 847.71.
The Nikkei was supported by a weaker yen as investors estimate that Japan’s new premier Shinzo Abe would keep up his pressure campaign for more aggressive policy moves from the Bank of Japan, said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
Abe was elected prime minister Wednesday by Japan’s lower house, after he swept to power on a hawkish platform of getting tough on diplomacy while fixing the economy with active fiscal spending and monetary easing.
Last week, Japan’s central bank launched its third round of easing since September, after its counterparts in the US and Europe also ushered in huge measures. The move was widely seen as a bow to Abe’s pressure campaign.
Markets were also watching out for a last-minute deal on the fiscal cliff package of tax hikes and spending cuts as a January 1 deadline looms for deeply divided US lawmakers who have yet to reach a new budget deal.
“The key is how the US fiscal cliff will be sorted out although not many expect there will be an easy solution,” Okumura told Dow Jones Newswires.
There are growing fears that the package would come into effect, and likely drag the world’s biggest economy into recession.
In forex trade, the greenback bought 85.33 yen in late afternoon Tokyo trade. Wednesday’s session marked the dollar’s first climb above the 85-yen level since April 2011 and up from 84.78 yen in Tokyo afternoon trade on Tuesday.
A strong yen is negative for Japanese markets as it erodes exporters’ revenue and makes their products less competitive overseas.
The Japanese currency has been declining as Abe, whose Liberal Democratic Party won a landslide national election this month, steps up pressure on the central bank to take bold easing steps.
In Tokyo trade, Sony ended up 3.96 percent at 943 yen and while TDK added 4.83 percent to 3,100 yen.