Tokyo stocks extended a global equities rally Friday, closing at their highest level in almost two months after the head of the European Central Bank hinted at further economic stimulus for the eurozone. Traders tracked gains in New York and Europe that came in reaction to Mario Draghi's comments, which threw the light on a Bank of Japan policy meeting next week with hopes it will expand its own monetary easing programme.
"The Draghi jawbone sent Asian markets flying today," IG Ltd analyst Angus Nicholson said in a note. "Draghi's speech was as dovish as it could be without actually further easing monetary policy, with a pledge to 're-examine' the 'degree of monetary accommodation' at the December meeting," he said.
The ECB chief's comment ignited talk the bank will ramp up its already vast bond-buying scheme - essentially printing more cash - in a bid to fan chronically weak inflation and kick-start torpid growth. In Tokyo, the benchmark Nikkei 225 index advanced 2.11 percent, or 389.43 points, to 18,825.30, its best finish since late August, while the broader Topix index of all first-section shares was up 1.95 percent, or 29.62 points, to 1,547.84.
The BoJ's meeting comes as it faces fresh calls to widen its already vast stimulus programme following a string of weak data and in the face of a painful growth slowdown in China. Japan's latest earnings season also kicks off next week. In Tokyo trading, Toyota gained 1.26 percent to end at 7,522 yen, while Honda rose 4.01 percent to 4,063 yen. Telecom firm SoftBank advanced 2.21 percent to 6,590 yen, while market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, was up 1.50 percent at 43,870 yen. Japan Tobacco, whose shares have been hit in recent weeks after announcing a $5.0 billion acquisition in the United States, jumped 4.56 percent to end at 4,283 yen.
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