Tokyo: Tokyo stocks surged in early trade Monday after the yen weakened on Federal Reserve chief Janet Yellen’s suggestion that US interest rates could rise in the near term.
Japan’s consumer electronic manufacturers and automakers such as Toyota and Nissan got a sharp boost from the yen’s slide against the greenback following Yellen’s remarks Friday at the Jackson Hole symposium of global central bankers.
he US central bank head said the case for a rate increase had “strengthened” in recent months but did not give a clear signal of timing.
“There’s no reason to wait another few months for a US rate hike,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center, told Bloomberg News.
“The US put off a rate increase in wake of Brexit, and the view seems to be that the state of the country’s economy has further improved.”
In forex markets, the dollar rose to 102.05 yen from 101.77 yen in New York and 100.48 yen in Tokyo earlier Friday.
A weaker yen is a plus for Japan’s exporters as it boosts their overseas profitability.
Sentiment among Japanese investors also improved on the back of a weekend speech by Bank of Japan Governor Haruhiko Kuroda at the annual Jackson Hole conference.
In his remarks, Kuroda said there is no doubt the BoJ has “ample space” for taking additional easing measures.
About 20 minutes after the opening bell, the benchmark Nikkei 225 index soared 2.16 percent, or 353.34 points, to 16,714.05, rebounding after ending in the red for two straight days.
The broader Topix index of all first-section shares rose 2.02 percent, or 25.97 points, to 1,313.87.
Japanese investors will now be keeping an eye on US and Japanese jobs data, as well as other figures from Tokyo including household spending and factory output this week.
In early share trading, Toyota and Honda surged more than three percent and rival Nissan gained 2.6 percent.
Factory robot maker Fanuc tacked on 3.6 percent and Panasonic gained 2.9 percent.
Energy-linked shares also rose, with Inpex soaring 3.3 percent and refiner JX Holdings 1.6 percent higher.