Tokyo stocks rose 2.1 percent on Monday, gaining for a fourth day after fewer-than-expected US job losses in August bolstered optimism that the US economy would not fall back into recession. The benchmark Nikkei picked up momentum after it broke above its 25-day moving average for the first time in about a month, and has climbed more than 5 percent this month following a 7.5 percent slide in August.
But it remains one of the worst performing major world stock markets this year, hurt by worries about the impact of the yen's strength on corporate earnings and the fragile economic recovery. The benchmark Nikkei rose 187.19 points to 9,301.32, above its 25-day moving average of 9,229, with some market participants citing buying by domestic investors and short-covering of futures by foreigners.
The 25-day moving average is considered a proxy for a one-month moving average and is closely watched in Japan. The Nikkei's next target is seen at around 9,460, where the bottom of its Ichimoku cloud lies, while support lies at 9,049, its tenkan sen, an indicator of short-term trends. Ichimoku charts are popular with Japanese traders.
The Nikkei's MACD is headed upwards after a bullish cross, suggesting upward momentum and a possible short-term rebound, though its slow stochastic is edging closer to overbought territory. The broader Topix rose 1.8 percent to 838.71. In Asia trade, the dollar was trading at 84.37 yen. The dollar hit a 15-year low of 83.58 yen on electronic trading platform EBS late last month on fears the US economic recovery was stalling.
Shares of exporters that are particularly sensitive to the health of the global economy led gains. Kyocera Corp jumped 3.9 percent to 7,770 yen and TDK Corp climbed 3.1 percent to 4,785 yen. Tokyo Electron Ltd was up 3.9 percent at 4,160 yen.
Mazda Motor Corp rose 3.7 percent to 194 yen after the Nikkei business daily reported at the weekend the automaker was taking emergency cost-cutting steps to soften the impact of the rising yen on its profit target for this year. Some 1.49 billion shares changed hands on the Tokyo exchange's first section, near a two-week low hit last week. Advancing shares outnumbered declining ones by more than 12 to 1.