Tokyo's benchmark stock index closed on Tuesday above the key 20,000 mark for the first time since late August thanks to upbeat data on investment by Japanese companies. The better-than-expected 11.2 percent jump in third-quarter capital spending opens the door to an upward revision of the GDP figure next week, analysts said. Initial estimates showed the world's number three-economy fell into recession during the April-September period, the second time since Prime Minister Shinzo Abe came to power almost three years ago on pledges to boost growth.
"Japan's capex (capital expenditure) numbers were exceptionally good," Akio Yoshino, chief economist in Tokyo at Amundi Japan, told Bloomberg News. "It's giving investors peace of mind. Japan's economy isn't as bad as people thought." At the close, the Nikkei 225 at the Tokyo Stock Exchange had surged 1.34 percent, or 264.93 points, to 20,012.40. The broader Topix index of all first-section shares advanced 1.37 percent, or 21.70 points, to finish at 1,601.95.
The Tokyo market also won some support from a weaker yen - a plus for Japanese exporters - as investors await a European Central Bank meeting Thursday that could see it unleash further monetary easing to boost the eurozone economy. Dealers are also keeping a close eye on a key US jobs report at the end of the week, as the Federal Reserve gets set to raise interest rates as early as this month. In share trading Toyota rose 1.37 percent to 7,762 yen, Sony advanced 1.57 percent to 3,227 yen and factory robotics maker Fanuc gained 2.28 percent to 22,420 yen.
Banking giant Mitsubishi UFJ rose 1.86 percent to 804.7 yen, while market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, added 0.22 percent to 49,890 yen. Toyota's rival Nissan dropped 1.93 percent to 1,289 yen on reports the automaker may raise its stake in its French ally Renault to 25 percent or more, from the current 15 percent with no voting rights.
The possible move comes amid tensions over the role of the French state in the Renault-Nissan alliance, after Paris controversially raised its stake in Renault to 19.7 percent, giving it double voting rights. On currency markets the dollar was slightly weaker at 122.99 yen from 123.09 yen in New York on Monday, but still higher than rates seen in Tokyo earlier Monday. The euro rose to $1.0581 and 130.13 yen compared with $1.0566 and 130.05 yen in US trade.