TOKYO: Tokyo stocks rose 1.62 percent to a five-month high Thursday, tracking Wall Street's gains as the US Federal Reserve hinted that interest rates would stay at record lows well into next year.
The Nikkei-225 index rose 245.36 points to close at 15,361.16, its highest since late January, while the Topix index of all first-section shares climbed 1.59 percent, or 19.89 points, to 1,269.04.
The benchmark Nikkei, which put in its best annual showing in four decades last year, is still down about six percent from its end of 2013 closing level of 16,291.31.
After a closely watched meeting Wednesday, the Fed said it would slash a further $10 billion off its monthly bond-buying and maintain its "highly accommodative" monetary policy of record low interest rates.
The central bank's chief Janet Yellen downplayed recent data showing accelerating, but still tame, inflation, and said unemployment was still too high.
The decision boosted Wall Street, sending the S&P 500 up 0.77 percent to an all-time high.
An equity trading director at a European brokerage said the Fed's dovish tone "has calmed jitters about mid-term growth".
In currency markets, the dollar was at 101.84 yen in Tokyo Thursday afternoon, slightly down from 101.91 yen in New York.
"The Fed didn't say much that the market hadn't already perceived; hence US stocks' generally positive overnight reaction," said Nicholas Smith, equity strategist at brokerage CLSA.
"More interesting is the fact of Japan shares' divergence from the dollar/yen market gyrations; the market is up strongly despite a weaker dollar."
A weaker-dollar yen rate tends to weigh on the Tokyo market as it dents the profitability of Japanese exporters.
Tokyo's rise came as Japanese lawmakers started debating a bill that could see casinos legalised in a market long viewed as a potential gold mine for gambling operators.
"Casino legalisation would prove government's commitment to deregulation," Daiwa Securities chief technical analyst Eiji Kinouchi told Dow Jones Newswires.
In share trading, Sony jumped 3.71 percent to end at 1,705 yen, as its chief executive Kazuo Hirai repeated a pledge at the annual shareholders' meeting to turn around Sony's dire finances.
Toyota rose 2.19 percent to 6,013 yen and videogame giant Nintendo added 0.56 percent to 12,410 yen.
Electronics maker Sharp gained 3.50 percent to 325 yen after announcing that it has developed an LCD panel that can formed into different shapes other than a traditional rectangle, broadening their potential use. (AFP)