Tokyo stocks close up 1.28%
Thursday, 24 January 2013
TOKYO: Tokyo stocks rose 1.28 percent Thursday, reversing earlier losses as the yen slumped on the back of fresh data showing Japan logged a record trade deficit last year.
The benchmark Nikkei 225 index closed up 133.88 points to 10,620.87, while the broader Topix index of all first-section shares was up 1.11 percent, or 9.83 points, at 897.62.
Tokyo reported a record $78 billion trade deficit for 2012 as exports were hit by weak demand in debt-hit Europe and a bitter diplomatic spat with its biggest trade partner China, which sparked a consumer boycott.
The gloomy numbers spell more bad news for the world's third-largest economy, as it struggles to cement a recovery after the 2011 quake-tsunami disasters and subsequent nuclear crisis at Fukushima.
They also underscore the size of the task ahead for the new government of Prime Minister Shinzo Abe who campaigned on a pledge to turn around Japan's fortunes with big public spending and by pressuring the Bank of Japan for more aggressive monetary policy.
Thursday's news sent the yen lower, capping a recent rally that began Tuesday as dealers were left disappointed by the BoJ's announcement of an open-ended easing programme and adoption of a two percent inflation target, aimed at beating Japan's long-running deflation.
In forex trade, the greenback firmed to 89.31 from 88.56 yen in New York late Wednesday, while the euro gained to 119.13 yen from 118.00 yen.
On Wednesday, the Japanese government cited a weakening yen and stronger car sales for an upward revision to its assessment of the nation's economy for January, its first upgrade in eight months.
The economy "has shown weakness recently due to deceleration of the world economy, (but) signs of bottoming out can be seen in some areas," the Cabinet Office said in its monthly report.
The rise in Tokyo equities also followed a positive lead from Wall Street, where the Dow gained 0.49 percent to its highest level since October 2007.
Shares of major Japanese exporters benefited from the weaker yen, which helps make them more competitive overseas.
Sony rose 1.88 percent to 1,189 yen, Nikon added 0.97 percent to 2,583 yen and Toyota was up 2.16 percent at 4,245 yen.
Olympus slipped 0.65 percent to 1,973 yen after a two-day rally on hopes that the camera and medical equipment maker would be taken off the Tokyo bourse's "supervisory post" that signals a possible delisting.
The company was put on the list after a high-profile accounting scandal. (AFP)