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Tokyo stocks open higher on cheaper yen

Jun 07 2018 07:36

Tokyo - Tokyo stocks opened higher on Thursday supported by a cheaper yen, reflecting speculation about the European Central Bank's possible movement towards ending its massive bond-buying programme.

The benchmark Nikkei 225 index rose 0.49% or 111.93 points to 22 737.66 in early trade while the broader Topix index was up 0.42% or 7.49 points at 1 785.08.

ECB policymakers will discuss at a meeting next week when to wind down their bond-buying spree that has propped up the eurozone economy for the past three years, a top official said on Wednesday.

"As investors remain jittery over trade and tariffs, higher global bond yields on the hawkish ECB inference are driving financials higher," Stephen Innes, head of currency trading for Asia Pacific at Oanda, said in a note to clients.

"And while interest rates are usually a negative for equity markets, investors are viewing higher interest rates in a favourable light," he said.

The dollar weakened to ¥110.13 in early Asian trade from ¥109.79 reflecting expectations for the ECB's policy normalisation, dealers said.

"Rallies on Wall Street and the dollar-yen that made a breakthrough at the ¥110 mark are supporting the Japanese stocks market," Okasan Online Security said in a commentary.

In Tokyo, automakers were among gainers, with Toyota rising 1.36% to ¥7 576, Honda trading up 1.05% at ¥3 547 and Nissan up 0.77% at ¥1 100.

Sumitomo Metal Mining rallied 3.61% to ¥4 695 after a brokerage firm upgraded their estimate of the value of the shares.

Banks also gained, with Mitsubishi UFJ rising 2.25% to ¥688.1 and Sumitomo Mitsui Financial up 1.41% at ¥4 646.

On Wall Street, the Dow and the Nasdaq closed at a record high for the third straight session after the ECB comments.

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equities  |  markets  |  tokyo stocks


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