Tokyo stocks up by break, Toshiba dives on loss fears

Tokyo - Tokyo stocks jumped on a weak yen on Wednesday morning as Federal Reserve boss Janet Yellen signalled that US interest rates could rise at anytime, but Toshiba tumbled again on worries about its battered finances.

Yellen presented an upbeat view of the world's largest economy in her testimony to Congress, noting labour market conditions continue to improve and inflation is inching up to the Fed's two percent target.

She confirmed another rate increase was on the way, which leaves open the possibility of a move at the March 14-15 policy meeting.

That propelled the dollar to ¥114.37 from ¥114.27 in New York and sharply up from the ¥113.40 in Tokyo earlier on Tuesday.

A weaker yen is good news for Japan's exporters as it makes their products more competitive overseas and inflates repatriated profits.

Tokyo's benchmark Nikkei 225 index rose 234.52 points, to 19 473.50 by the break, while the Topix index of all first-section issues was up 17.10 points, to sit at 1 556.22.

Wall Street's three main indexes set records for a fourth straight session on Tuesday after President Donald Trump's promise last week to unveil "phenomenal" US tax reforms soon.

"In principle, the Trump rally continues," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.
"Yellen seemed so positive" towards hiking interest rates, he told AFP.

Mobile carrier SoftBank's shares rose 1.15% to ¥8 634 after it announced it will buy US asset-management firm Fortress Investment Group for $3.3bn in cash.

Toyota tacked on 0.63% to trade at ¥6 495 while camera and copier maker Canon gained 0.97% to ¥3 322 by the break.

Toshiba sank 10.4% to ¥205.9, extending Tuesday's 8% selloff. The drop was sparked by growing fears about the firm's finances as it issued a grim preliminary earnings forecast on Tuesday.

The firm said it was on track for a net loss of ¥390bn in the fiscal year to March, hit by a write down topping ¥700bn at US nuclear division Westinghouse Electric.

Toshiba's chairman quit his post as it delayed the release of formal financial results and also revealed it was investigating possible misconduct by senior executives at the division.

A whistle blower had complained top executives in the US had exerted "inappropriate pressure" over accounting at the firm, Toshiba said.

The revelation comes less than two years after Toshiba - one of Japan's best-known companies - was hammered by an embarrassing profit-padding scandal.