Tokyo stocks open up 1.25 percent

AFP FILE PHOTO

TOKYO–Tokyo stocks opened 1.25 percent higher on Friday as the yen plunged on expectations that the Bank of Japan would take further easing measures at a policy meeting in late January.

The Nikkei 225 index at the Tokyo Stock Exchange was up 133.50 points at 10,786.14 at the start.

The dollar was at 89.18 yen in early Asian trade Friday against 88.64 yen in New York Thursday afternoon. Earlier Friday the greenback briefly rose to 89.34 yen, the highest level since June 2010.

“Prime Minister Abe’s promises for fiscal reform and more central bank easing have shown signs of concrete action, which has allayed some concerns that his talk thus far has been just bluster,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Abe’s government is set to unveil a massive 20 trillion yen ($225 billion) billion extra budget on Friday designed to breathe life into the world’s third-largest economy, rebuild disaster-hit areas and beef up the military.

Abe has also reiterated in recent interviews with Japanese media that he would press the central bank to make more efforts to pull the nation out of years of deflation, as it is set to hold a policy meeting on January 21-22.

“Brighter signs on the outlook for the global economy are also fuelling more risk-on enthusiasm,” Nishi told Dow Jones Newswires.

The euro remained bullish after European Central Bank chief Mario Draghi made upbeat remarks about the eurozone’s economic outlook.

Draghi dashed speculation of an interest rate cut, saying the ECB decision to leave its record-low rate unchanged was “unanimous,” propelling the euro higher.

The euro fetched 118.32 yen after rising past 118.00 yen for the first time since May 2011. The common currency was at 117.53 yen in New York Thursday afternoon.

Against the dollar the euro bought $1.3266, almost flat from US trade.