TOKYO: – Tokyo stocks rose 1.26 percent Friday morning, with exporters lifted by a weaker yen as investor sentiment was boosted by a strong US retail sales report.
The Nikkei 225 index at the Tokyo Stock Exchange gained 217.50 points to 17,474.90 by the break, while the Topix index of all first-section issues was up 0.84 percent, or 11.79 points, at 1,408.83.
The yen fell against the dollar after the Commerce Department said US retail sales in November, when the holiday shopping season starts, rose 5.1 percent over the year. The figures are closely watched as consumer spending accounts for almost three quarters of output in the world’s biggest economy.
Also, jobless claims, a sign of the pace of layoffs, fell in the week to December 6.
The dollar edged up to by midday, from 118.65 yen in New York and sharply higher than the mid-117 yen range seen earlier Thursday in Tokyo.
A weak yen is positive for Japanese exporters as it makes them more competitive abroad and inflates profits when they are repatriated.
The benchmark Nikkei lost nearly four percent over the previous three days after hitting a new seven-year high on Monday.
“The recent three-day selloff put stocks back in ‘affordable’ territory after valuations had started to look stretched,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
He said there remained plenty of technical resistance at the 18,000 Nikkei level.
But forthcoming data — including a US consumer sentiment survey for December later Friday and a policy meeting of the US Federal Reserve next week — will be “critical to determining market direction”, he said.
While the results of Sunday’s snap election in Japan will be closely followed, no major changes affecting markets are expected, with Prime Minister Shinzo Abe’s ruling coalition forecast to keep its grip on power, he said.
Abe’s pro-spending policy to stoke growth has boosted stocks and pushed the yen down.
Shares in Canon jumped 4.59 percent to 3,982.0 yen as it announced a dividend hike on profit growth.
Troubled budget airline Skymark added 1.98 percent to sit at 311 yen after surging 32 percent over the previous two sessions on hopes for code-sharing with two major Japanese carriers and a possible cash injection by investment funds.
— Dow Jones Newswires contributed to this article –