Tokyo: Shares open 2.05% higher as yen slides

TOKYO shares opened higher on Monday as investors cheered the yen’s slide with their eyes on the Bank of Japan’s possible upcoming interest rate hike.

The benchmark Nikkei 225 index jumped 2.05 per cent or 793.92 points to 39,501.56 in early trade, while the broader Topix index climbed 1.60 per cent, or 42.61 points, to 2,713.41.

The dollar stood at 149.22 yen, rebounding from 149.08 yen seen on Friday in New York and 148.47 yen in Tokyo.

Major Japanese media and economists are betting that the Bank of Japan will drop its negative interest rate policy.

The central bank is scheduled to start a two-day policy board meeting from Monday, with governor Kazuo Ueda’s press conference scheduled for Tuesday afternoon.

Despite the speculation on a long-awaited rate increase, Ueda is expected to voice broad commitment to maintain easy monetary conditions to safeguard Japan’s fragile growth.

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Gains of large cap shares were driving up the Nikkei index on Monday, Nomura Securities said, adding that “shares are rising across the board”.

“This indicates that the market believes, even if the Bank of Japan were to adjust its policy, it would not bring any chaos to the market,” the brokerage said.

Heavily weighted Fast Retailing, which operates the Uniqlo brand, jumped 3.32 per cent to 45,480 yen.

Semiconductor shares also enjoyed healthy gains. Tokyo Electron added 2.54 per cent to 36,310 yen and Advantest jumped 2.33 per cent to 6,586 yen.

Sony Group rose 1.76 per cent to 13,295 yen. Toyota added 2.09 per cent to 3,561 yen. Mitsubishi UFJ Financial Group added 1.43 per cent to 1,526 yen. AFP