Tokyo stocks rose for a third session Wednesday, ending just shy of levels seen before Britain's vote to leave the European Union sent markets into a nosedive last month. Banks and automakers led the gains as a weaker yen and a strong session on overseas markets lifted sentiment in Japan, while investors await details of a promised stimulus package.
This week, Japanese Prime Minister Shinzo Abe said Tokyo would draw up a fiscal plan to kick-start economic growth - following a landmark victory of his ruling coalition in weekend parliamentary elections. The package could be worth around 10 trillion yen ($97 billion), Japanese media said, though earlier reports put the possible amount at double that figure. Speculation that Japan's central bank may also move at its meeting later this month added to the improved sentiment.
"Risk assets are rallying, driven by renewed hopes of monetary and fiscal stimulus," James Woods, a Sydney-based strategist at Rivkin Securities, told Bloomberg News. "The rally looks sustainable... Abe will definitely add some kind of fiscal stimulus to boost the Japanese economy."
However, Japan's top government spokesman Yoshihide Suga on Wednesday rejected a report in the Sankei newspaper that the government was considering so-called helicopter money to stimulate growth. The term tends to refer to stimulus that would be pumped straight into the economy - such as into people's bank accounts - rather than through the banking system by means of asset purchases and other easing measures. The Nikkei 225 ended 0.84 percent, or 135.78 points, higher at 16,231.43, less than 10 points shy of its pre-Brexit level.
The broader Topix index of all first-section shares jumped 1.13 percent, or 14.53 points, to 1,300.26, finishing at its highest level in about a month. In share trading, Toyota tacked on 3.39 percent to end at 5,628 yen, while banking giant Mitsubishi UFJ Financial Group jumped 5.28 percent to 497.6 yen and energy explorer Inpex surged 3.53 percent to 801.5 yen. Sony bucked the trend, slipping 2.13 percent to 3,074 yen. Yamaha Motor soared 9.77 percent to 1,685 yen on news that the motorcycle giant will replace Sharp on the Nikkei 225 next month.
In March, Sharp agreed to be acquired by Taiwan's Hon Hai Precision, better known as Foxconn, after the Japanese electronics giant was pummelled by years of huge losses and mounting debts. On Wednesday, Sharp slumped 5.45 percent to 104 yen. Nintendo eased 4.42 percent to 21,6830 yen as investors booked profits after the videogame giant surged nearly 60 percent since Thursday on the back of huge demand for its new smartphone game Pokemon GO. The dollar eased to 104.34 yen from 104.66 yen in New York, but was well up from 103.33 yen in Tokyo earlier Tuesday.
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