Tokyo shares surged Monday as exporters rallied on a weaker yen after strong US jobs data bolstered the case for a December Federal Reserve interest rate hike. The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 2.0 percent, or 377.14 points, to 19,642.74, adding to last week's gains. The broader Topix index of all first-section shares finished up 1.75 percent, or 27.38 points, at 1,590.97.
The yen weakened against the greenback after Friday's US Labour Department report showed the world's biggest economy created almost twice as many jobs in October as in September. The news ramped up speculation the Fed will hike rates at its December meeting. The news sent the dollar surging in New York on Friday, hitting 123.16 yen against 121.66 earlier in the day in Asia. On Monday in Asia it was at 123.50 yen.
"It's likely we will see the yen weaken to mid-124 yen to the dollar, because of the different directions of the US and Japan's interest rates," Shoji Hirakawa, chief equity strategist at Okasan Securities Co, told Bloomberg News. That "will bring big advantages to Japanese exporters. The effect of the Chinese economy's slowdown looks like it will be limited, and it's almost certain that the Federal Reserve will hike interest rates in December".
A weak yen makes Japanese exporters more competitive overseas and inflates the value of their repatriated profits. In share trading, camera and medical device maker Olympus surged almost 17 percent to 4,830 yen after the firm's net profit for the first half of 2015-2016 jumped more than analysts expected.
Car maker Toyota added 1.63 percent to 7,625 yen, while electronics giant Sony gained 2.17 percent to 3,478 yen, and market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, was up 2.90 percent to 46,720 yen. In other currency trading, the euro rose to $1.0769 and 132.82 yen from $1.0742 and 132.30 yen in US trade.
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