TOKYO: Tokyo's Nikkei 225 surged 2.88 percent Friday as a weak yen and high hopes for US and Japanese corporate earnings helped push the benchmark index to its best close in nearly three years.
The Nikkei finished 305.78 points higher at 10,926.65, its highest close since April 2010, while the broader Topix index of all first-section shares ended up 2.17 percent, or 19.47 points, at 917.09.
The Tokyo market has soared in recent months after a new Japanese government swept to power with promises to fix the nation's long-suffering economy.
Friday's rise was helped by a slide in the yen, which is good news for exporters, and boosted "hopes for an acceleration in the global economic recovery", said Hiroichi Nishi, SMBC Nikko Securities general manager of equities.
"Generally solid US corporate earnings are generating the feeling that Japanese earnings results, many of which are awaited next week, will also be good," he added.
In afternoon Tokyo forex trade, the dollar bought 90.51 yen, against 90.40 yen in New York, while the euro was at 120.96 yen against 120.91 yen. The single currency fetched $1.3362, from $1.3376.
"The abrupt drop in the yen is spurring reflexive index and futures buying," an equity trading director at a foreign brokerage told Dow Jones Newswires.
The slide, after the new conservative government swept to power on pledges to pressure the Bank of Japan into aggressive easing, which tends to weaken the yen, has sparked criticism Tokyo was meddling with exchange rates.
On Thursday, German Chancellor Angela Merkel voiced concern about Japan's foreign exchange policy, after the central bank set out a plan for indefinite monetary easing and adopted a new inflation target to stoke economic growth, widely seen as bowing to political pressure.
However, Japan's Finance Minister Taro Aso on Friday rejected claims Tokyo was orchestrating a slide in the yen.
"The criticism that (the government) is manipulating the currency rate is completely off the mark," Aso was quoted as saying in the online edition of the leading Nikkei business daily.
Meanwhile, the Tokyo market largely shrugged off official data showing Japan's long-suffering economy remained stuck in a deflationary rut, with core consumer prices slipping 0.1 percent in 2012, the fourth annual decline.
At the close, Canon was up 1.51 percent to 3,350 yen, Toyota rose 2.23 percent to 4,340 yen, Nikon slipped 0.34 percent to 2,574 yen and Sony jumped 8.49 percent to 1,290 yen.
Sony's spike followed a report that a Japanese government-backed fund will spearhead a plan to merge the lithium-ion battery businesses of the struggling electronics giant and other major Japanese firms.
On Wall Street Thursday, the blue-chip Dow Jones Industrial Average added 0.33 percent to 13,825.33, lifted in part by an improvement of the weekly US jobless claims data, although the tech-heavy Nasdaq fell 0.74 percent.
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