Tokyo stocks up 0.40pc by break

February 17, 2014 - 9:31:31 am

TOKYO: Tokyo stocks rose 0.40 percent Monday morning, after gains on Wall Street and as investors digested weaker-than-expected Japanese growth data.

The Nikkei-225 index climbed 56.75 points to 14,369.78 by the break while the Topix index of all first-section issues was up 0.32 percent, or 3.73 points, to 1,187.55.

US stocks Friday vaulted higher as investors shrugged off a report showing poor industrial output last month as mainly weather-related.

The Dow Jones Industrial Average rose 0.79 percent to 16,154.39.

The Tokyo market saw a volatile session.

The Nikkei dipped into negative territory after opening slightly firmer, weighed down by government data that showed that Japan's economy grew less than expected in the final three months of 2013.

Japan's economy logged its best performance in three years, expanding 1.6 percent, but it expanded just 0.3 percent between October and December.

Toru Suehiro, a market economist at Mizuho Securities in Tokyo, said the pro-spending policies of Prime Minister Shinzo Abe, dubbed Abenomics, propelled Tokyo's long-dormant stock markets sharply higher and prompted the wealthy consumers to open wallets.

"Abenomics successfully stimulated consumption in the first half of 2013," he said.

"But such 'wealth effects' won't last forever," as even those rich consumers holding stocks will not keep spending at a high pace without increases in wages, he told Dow Jones Newswires.

The yen strengthened in Asia Monday as investors shuffled their positions after the Japanese growth figures dented confidence.

In midday Tokyo trade, the dollar slipped to 101.57 yen, from 101.81 yen in New York Friday afternoon.

Traders said market players await for comments from the Bank of Japan (BoJ) Tuesday as it wraps up a two-day policy meeting Tuesday.

"The hard floor for the Nikkei looks like 14,000. With earnings reporting season largely over, players are looking for the next catalyst, which might be anything the BoJ has to say about GDP and any changes it may harbour in its economic outlook," said an equity trading director at a foreign brokerage.

Rakuten plunged 8.26 percent to 1,520 yen after Japan's largest online shopping mall operator said Friday it would buy Cyprus-based application maker Viber Media for $900 million. (AFP)