Tokyo stocks close 1.27pc higher

May 01, 2014 - 9:11:12 am

TOKYO: Tokyo stocks closed 1.27 percent higher Thursday, boosted by some upbeat corporate earnings and tracking a rise on Wall Street after the Federal Reserve said the US economy was picking up.

The benchmark Nikkei 225 index added 181.02 points to finish at 14,485.13, while the Topix index of all first-section issues closed 1.70 percent, or 19.76 points, higher at 1,182.20.

Japanese companies that have reported upbeat annual earnings led the market higher although trading volume remained low, with many Asian markets closed for public holidays.

"The market remains trapped in a boxed trading range in which the lack of participants and profound currency market moves make a breakout difficult," said Kenichi Hirano, market analyst at Tachibana Securities.

"Good earnings reports may help bolster downside support, but some earnings reports have been weak -- even without factoring in the April 1 national consumption tax hike (in Japan)," he told Dow Jones Newswires.

There are fears that Japan's decision to hike sales taxes to 8.0 percent from 5.0 percent this month would take a bite out of consumer spending and dent a recovery in the wider economy.

In the US, the Fed, concluding a two-day policy meeting Wednesday, said economic activity "has picked up recently after having slowed sharply during the winter in part because of adverse weather conditions".

The US central bank, as expected, continued a plan to gradually taper its bond-buying stimulus programme, while maintaining ultra-low interest rates.

The Fed's positive outlook outshone a disappointing report from the Commerce Department, which said gross domestic product grew by a scant 0.1 percent annual rate in the first quarter.

The Dow Jones Industrial Average Wednesday rose 0.27 percent to a new record close of 16,580.84.

In Tokyo forex markets, the dollar bought 102.17 yen, slightly weaker than 102.23 yen in New York Wednesday.

In share trading, brokerage house Nomura Holdings surged 6.29 percent to 625 yen while Daiwa Securities rose 3.14 percent to 789 yen. Both reported strong earnings for the year ended in March.

Fujitsu jumped 6.33 percent to 638 yen after swinging back to the black for the just-ended fiscal year. (AFP)