TOKYO, March 24 ― Tokyo's key Nikkei stock index surged more than five per cent today, boosted by a weak yen and aggressive asset-buying from the Bank of Japan (BoJ).
The Nikkei 225 shot up 5.09 per cent, or 859.05 points, to 17,746.83 in mid-morning trade while the broader Topix index was up 2.29 per cent, or 29.53 points, at 1,321.54.
“The dollar's overwhelmingly strong now,” said Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Institute.
The greenback was changing hands at ¥110.91 (RM4.45) early today, down from ¥111.26 in New York yesterday afternoon but still sharply higher than ¥105-107 ranges seen a week ago.
A cheaper yen is good for Japanese exporters as it makes their products more competitive abroad while inflating profits when repatriated.
“Also investor sentiment has been supported by the Bank of Japan's buying of ETFs (exchange-traded funds),” he said.
Suzuki also noted overnight drops in New York were not as bad as expected.
Financial firms and energy companies that are heavyweights on the US Dow are not so prominent in Japan, he added.
Global equity markets had mostly tumbled yesterday despite fresh stimulus announcements as the economic toll from the coronavirus continued to mount.
The US Federal Reserve unveiled a batch of additional aggressive measures to support the economy, but the boost was countered when divided politicians again failed to agree on key stimulus measures.
The Dow suffered another big drop, this time of 3.0 per cent as the New York Stock Exchange completed its first all-electronic session in the wake of the crisis after the exchange suspended floor trading.
SoftBank Group kept soaring on a share-buyback scheme, gaining 20.08 per cent to ¥3,827 after rising more than 18 per cent yesterday.
Toyota gained 0.87 per cent to ¥6,223 despite announcing temporary production suspension at five domestic plants to cope with slumping demand due to the coronavirus outbreak.
Public broadcaster NHK reported Toyota and major telecom group NTT would make a capital tie-up for a “smart city” project, putting up some ¥200 billion ($1.8 billion) each.
NTT was down 1.52 per cent at ¥2,462.
Toyota has said it will build a smart city at the foot of Mount Fuji.
Japan Post rose 4.35 per cent to ¥807.9 on media reports that the group is planning to slash 10,000 or five percent of post office personnel.
Sony rose 1.77 per cent to ¥5,970 and Canon gained 2.84 per cent at ¥2,292.5. ― AFP
