Tokyo stocks have jumped 3.51 per cent as Japan’s premier bourse got a boost from a weaker yen and following comments from US Federal Reserve officials aimed at soothing concerns over its stimulus program.
The benchmark Nikkei 225 index on Friday closed up 463.77 points to 13,677.32, while the Topix index of all first-section shares climbed 3.19 per cent, or 35.01 points, to 1,133.84.
Adding to buying sentiment was government data showing Japanese factory output in May rose by a better-than-expected 2.0 per cent month-on-month.
The figures, which were much better than a 0.2 per cent expected by analysts, come as Japan’s trade picture improves owing to a strong pick-up in business with the United States and China.
The news sent the yen lower, boosting exporters. Yen trading and the Nikkei’s movements are closely interlinked as the currency’s value impacts the profitability of firms shipping their goods overseas.
The US dollar was at Y98.74, compared with Y98.43 yen in New York late on Thursday and well up from the high-97 yen levels seen in Tokyo on Thursday.
“The stronger dollar and US market confidence should help the Nikkei to consolidate,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
The Nikkei surged 2.96 per cent on Thursday.
Wall Street rallied for a third straight session on Thursday following positive economic data and comments from a top Fed official that the bank would not hastily end its bond-buying, which helps keep interest rates low.
The bank’s New York president William Dudley said “a rise in short-term rates is very likely to be a long way off”.
He added that its policy deeply depends “on the progress we make towards our objectives” of pushing unemployment down to 6.5 per cent and getting the economy back up to strength.
“This means that the policy – including the pace of asset purchases – depends on the outlook rather than the calendar.”
In New York trade, the Dow rose 0.77 per cent, the S&P 500 added 0.62 per cent and the Nasdaq was 0.76 per cent higher.
Also in the United States, figures showed jobless claims continued to fall last week, while there was also a big increase in pending home sales.
In Tokyo trade on Friday, Sharp closed 8.10 per cent higher to Y400 after it announced plans to produce cutting-edge liquid crystal display panels for tablet computers, smartphones and other products in a Chinese joint venture.
SoftBank gained 2.47 per cent to Y5,790 as its founder, Masayoshi Son, pledged a hard push into the lucrative US telecoms market after a rival withdrew from a bidding war for Sprint Nextel.
Toyota rose 1.52 per cent to Y5,990 while Sony gained 2.11 per cent to Y2,078.
