Tokyo shares close 2.70pc higher

January 29, 2014 - 10:17:51 am

TOKYO: Tokyo stocks ended 2.70 percent higher Wednesday, ending a four-session losing streak as the dollar climbed on speculation the Federal Reserve will reduce its stimulus programme later in the day.

The benchmark Nikkei-225 index ended 403.75 points higher at 15,383.91, while the Topix index of all first-section shares rose 2.60 percent, or 31.87 points, to 1,256.18.

"Today's move in the Nikkei is largely a result of a more accommodative dollar level," said Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp.

"With Turkey and India raising interest rates and the US Fed set to make its decision on policy soon, markets are still cautious."

The rise marked easing concern over emerging market sell-offs after Turkey's central bank on Tuesday aggressively raised interest rates to defend the lira. India hiked interest rates earlier in the day.

Global equity and forex markets have been in turmoil since last week after a plunge in the Argentine peso sparked fresh worries about developing nations' economies.

Investors are focusing on the Fed meeting to see if it announces further cuts to its $75 billion-a-month stimulus, after paring it by $10 billion at its last meeting.

A pullback is a plus for the dollar but could exacerbate fears of a capital flight away from emerging markets as dealers look for safer investments.

Tokyo shares were boosted by the stronger dollar, which fetched 103.33 yen, up from 102.97 yen in New York Tuesday afternoon.

A weakening yen is positive for Japanese exporters as it makes them more competitive abroad and increases their repatriated profits.

Canon added 0.68 percent to 3,070 yen ahead of its April-December earnings announcement, and Uniqlo clothing chain operator gained 3.22 percent to 39,360 yen.

Sony rose 1.50 percent to 1,690 yen. After markets closed, the electronics giant said it plans to buy a chip plant from Renesas Electronics for 7.5 billion yen, and invest another 27.5 billion to boost production of image sensors used in smartphones and other devices with cameras.

Nintendo recovered earlier losses to end 1.25 percent higher at 12,880 yen before the Japanese electronics giant announced its April-December financial results.

Last week, it warned it would slip back into the red in its fiscal year to March on poor sales of the Wii U game console. (AFP)

 

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