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Tokyo stocks up by break, erasing Brexit drop

Tokyo stocks up by break, erasing Brexit drop

TOKYO: Tokyo stocks rose Wednesday morning on stimulus hopes, erasing steep losses sparked by Britain’s vote to leave the European Union last month.

Banks and automakers led the gains as a weaker yen and a strong session on overseas markets powered sentiment in Japan, while investors await details of a promised stimulus package.

This week, Japanese Prime Minister Shinzo Abe said Tokyo would draw up a fiscal plan to push up economic growth following a landmark victory of his ruling coalition in weekend parliamentary elections.

The package could be worth around 10 trillion yen ($97 billion), Japanese media said, though earlier reports put the possible amount at double that figure.

Speculation that Japan’s central bank may move at its meeting later this month has also lifted sentiment.

“Risk assets are rallying, driven by renewed hopes of monetary and fiscal stimulus,” James Woods, a Sydney-based strategist at Rivkin Securities, told Bloomberg News.

“The rally looks sustainable… Abe will definitely add some kind of fiscal stimulus to boost the Japanese economy.”

By the break, the benchmark Nikkei 225 index jumped 1.00 percent, or 161.16 points, to 16,256.81, building on two days of gains.

The broader Topix index of all first-section shares rallied 1.32 percent, or 16.93 points, to 1,302.66.

Toyota tacked on 2.77 percent to end the morning at 5,594 yen, while banking giant Mitsubishi UFJ Financial Group jumped 4.33 percent to 493.1 yen and energy explorer Inpex surged 3.38 percent to 800.3 yen.

Sony bucked the trend, slipping 0.92 percent to 3,112 yen.

Yamaha Motor soared 11.07 percent to 1,705 yen on news that the motorcycle giant will replace Sharp on the Nikkei 225 next month.

In March, Sharp agreed to be acquired by Taiwan’s Hon Hai Precision, better known as Foxconn, after the Japanese electronics giant was pummeled by years of huge losses and mounting debts.

On Wednesday, Sharp slipped 2.72 percent to 107 yen.

Nintendo eased 5.40 percent to 21,605 yen as investors booked a profit after the videogame giant surged nearly 60 percent since Thursday on the back of huge demand for its new smartphone game Pokemon GO.

The dollar dipped to 104.40 yen from 104.66 yen in New York, but was well up from 103.33 yen in Tokyo earlier Tuesday.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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