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Tokyo stocks surge as Japan election stokes stimulus hopes

Tokyo stocks surge as Japan election stokes stimulus hopes

TOKYO: Tokyo stocks soared Monday as a landslide victory for Japan’s ruling coalition in weekend elections boosted stimulus hopes, while Nintendo rocketed as gamers snapped up its new smartphone offering.

The benchmark Nikkei 225 index surged 3.98 percent, or 601.84 points, to finish at 15,708.82, while the broader Topix index of all first-section shares climbed 3.79 percent, or 45.91 points, to 1,255.79, its biggest one-day gain in nearly five months.

The parliamentary election sweep by Japan’s ruling coalition fanned speculation that the government would soon launch a stimulus package to kickstart growth, after winning a strong mandate.

“Investors are basically welcoming the victory of (Prime Minister Shinzo) Abe’s ruling coalition,” Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking, told AFP.

“But the question is whether or not stock prices can keep up this pace.”

Abe said Monday he will order his economy minister to draft fresh stimulus measures, the size of which could reach 20 trillion yen ($196 billion), Japanese media said.

Market sentiment got a lift as the US Labor Department said Friday that 287,000 jobs were created in June, 112,000 more than expected and a sharp improvement on weak figures in May that raised fears of a potential recession.

On Monday, Nintendo was a stand-out, rocketing more than 20 percent and extending a rally sparked by news that its Pokemon GO which connects a user’s real-world location to the game as they try to catch on-screen characters debuted at the top of gaming charts.

By the close, the videogame giant had jumped 24.52 percent to 20,260 yen, after a nearly nine percent rally on Friday.

The new title comes after the Super Mario maker released Miitomo, its first-ever mobile game, in March, as it moved away from a longstanding and much criticised consoles-only policy.

Earlier Monday, Japan-based messaging app Line said it could raise more than $1.0 billion in one of the year’s biggest share sales, as it makes its market debut this week.

Line, owned by South Korea’s Naver, starts trading in New York on Thursday and in Tokyo Friday.

Exporters won support Monday as Japan’s currency sharply weakened, which is good for their profitability.

On forex markets, the dollar jumped to 101.70 yen from 100.47 yen in the US on Friday.

In response, Toyota surged 4.86 percent to 5,301 yen while Nissan climbed 5.23 percent to close at 967 yen. Honda jumped 4.03 percent to 2,576 yen.

Sony soared 3.98 percent to 3,133 yen, while factory robot maker Fanuc surged 4.25 percent to 16,160 yen.

Banking shares also pushed higher, with Mitsubishi UFJ Financial Group rising 4.15 percent to 446.5 yen and rival Sumitomo Mitsui Financial Group tacking on 2.73 percent to close at 2,851 yen.

Energy explorer Inpex added 3.35 percent to 766.4 yen and refiner JX holdings gained 2.93 percent to 392.2 yen.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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