Tokyo stocks surged 2.93 per cent to close at their highest level in more than five years on Friday following the dollar’s jump past the 100 yen mark.
The benchmark Nikkei 225 index gained 416.06 points to 14,607.54, the highest since January 4, 2008 when it closed at 14,691.41. The Topix index of all first-section shares rose 2.43 per cent, or 28.77 points, to 1,210.60.
The jump came as the dollar topped 100 yen for the first time in more than four years in New York Thursday, thanks to aggressive stimulus efforts to reflate the world’s third-largest economy depressing the yen.
The greenback added to its gains in late afternoon Asian trade on Friday, changing hands at 101.05 yen, against 100.55 yen in New York Thursday afternoon.
“The dollar’s breach of the 100 yen level is iconic and will automatically draw more interest to Japan as a potential equity investment destination,” a fund manager at a foreign asset management company told Dow Jones Newswires.
Japanese Prime Minister Shinzo Abe has vowed to drag the country out of a years-long deflationary spiral with a policy of big government spending and aggressive central bank monetary easing, which tends to weigh on the yen.
Falling prices have plagued Japan for years, crimping private spending and business investment and translating into tepid economic growth.
The dollar’s gain followed US jobless claims figures, a sign of the pace of layoffs, falling to a seasonally adjusted 323,000 last week, its lowest level since mid-January 2008, the Labor Department reported.
On Wall Street, the Dow Jones Industrial Average slipped 0.15 per cent to 15,082.62 on Thursday as buyers took a breather after several successive record closes.
The weaker yen was one factor behind rises in outward facing companies listed on the exchange. A cheaper yen is largely good news for Japan’s exporters, whose products become less expensive overseas and whose repatriated profits swell.
Toyota Motor climbed 5.03 per cent to close at 6,050 yen, while Panasonic gained 3.73 per cent to 749 yen, before the electronics maker announced its earnings report later on the day.
Strong earnings news also strengthened the upward momentum, as Nikon sprang 14.57 per cent to 2,500 yen after the camera maker said its operating profit would beat forecasts.
Sony gained 2.46 per cent to 1,787 yen after it said it had booked its first annual net profit in five years, offering a glimmer of hope for the former market leader.
Sharp added 6.38 per cent to 450 after a report said it would cut an extra 5,000 jobs.