TOKYO: Tokyo shares rallied 3.59 percent in the morning session Friday, tracking gains in US and European markets on hopes for fresh European and Japanese central bank stimulus.
After weeks of heavy losses since the start of the year, investors globally were cheered by a pledge from the head of the European Central Bank that he was ready to further ease monetary policy.
That was followed Friday by a report in the respected Nikkei business daily that the Bank of Japan was also considering plans to unveil more of economy-boosting measures as inflation is hammered by crashing oil prices.
"With further hopes for policy coordination among the central banks, the market will be supported," Nomura Holdings senior strategist Juichi Wako told Bloomberg News.
"Things will still be volatile, but we'll generally be rising."
The benchmark Nikkei 225 index at the Tokyo Stock Exchange surged 575.58 points to 16,592.84 by the break, while the broader Topix index of all first-section shares gained 3.38 percent, or 43.94 points, to 1,345.43.
Friday's gains were a welcome shift after the tumultuous start to 2016 that has wiped 20 percent off the Nikkei, putting it at a 15-month low and officially in bear market territory.
ECB head Mario Draghi said Thursday there "are no limits" to how far it will go with its policy tools as inflation wallows at 0.2 percent, well off the bank's two percent target.
The comments sent European markets surging, while Wall Street also enjoyed a rare gain.
On Friday, the Nikkei cited a senior BoJ official saying the bank was also considering ramping up its already huge stimulus to fend off deflationary pressure caused by the oil price slump.
That provided some comfort to traders a day after bank boss Haruhiko Kuroda refused to indicate any alarm over the recent market volatility.
Speculation of a further loosening of monetary policy raised the prospect of more yen flooding the market, sending the currency lower.
The greenback edged up to 117.89 yen Friday from 117.66 yen in New York, giving a lift to exporters as it boosts their profitability and competitiveness overseas.
In share trading, Uniqlo-operator Fast Retailing, a market heavyweight, advanced 6.47 percent to 36,850 yen.
Toyota rose 4.46 percent to 6,677 yen while Softbank jumped 6.91 percent to 4,858 yen.
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