Tokyo stocks closed 1.59 percent higher Thursday, boosted by a weakening yen and rising expectations that Japan's national pension fund will add more stocks to its bond-heavy portfolio. The benchmark Nikkei-225 index added 237.12 points to 15,134.75, its highest close in five weeks, while the Topix index of all first-section issues rose 1.27 percent, or 15.46 points, to 1,228.36.
The market accelerated on the back of reports that a labour ministry panel was calling for pension fund managers to move away from investing in low-yielding bonds. The ministry runs the Government Pension Investment Fund (GPIF), the world's largest public pension fund worth about 128.6 trillion yen ($1.25 trillion) at the end of last year. "We thought the labour ministry was against the fund taking risks, so this is good news," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
Any move into riskier equities would mark a big shift for the conservatively managed fund, after the Nikkei soared 57 percent last year to its best annual run in more than four decades. The dollar's gains against the yen - good news for Japanese exporters - also helped lift the market. The greenback changed hands at 102.69 yen Thursday afternoon from 102.33 yen in New York Wednesday and well up from the mid-101 yen level earlier in the week.
The dollar won support from a Federal Reserve report that boosted optimism over the US economy, as well as easing tensions in the Ukraine crisis. In share trading, Sony climbed 2.35 percent to 1,825 yen and Toyota rose 1.85 percent to 5,869 yen. Japanese media reports have said the country's major automakers and electronics giants are set to raise employee wages as annual labour talks wrap up, ahead of a sales tax hike next month. The reported pay increases would be welcome news for Prime Minister Shinzo Abe who has been calling for such moves as part of his wider bid to stoke the world's third-largest economy. Toshiba rose 2.01 percent to 456 yen, despite news that a US nuclear fuel producer in which it had invested had filed for bankruptcy protection.
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