[TOKYO] Tokyo shares rose more than one per cent on Thursday following solid gains in New York as minutes from the Federal Reserve showed policymakers were increasingly confident in the outlook for the US economy.
The yen picked up from a three-month low against the dollar after the Bank of Japan decided against ramping up its monetary stimulus despite the world's third-largest economy slipping back into recession.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange closed up 1.07 per cent, or 210.63 points, at 19,859.81, while the broader Topix index of all first-section shares gained 0.87 per cent, or 13.85 points, to 1,600.38.
The gains in Tokyo were in line with an Asian rally after Wall Street's three main indexes surged.
After a two-day meeting, the BoJ on Thursday stood pat on its monetary policy, saying the economy "has continued to recover moderately", although it admitted exports and output had be hit by a slowdown in overseas economies.
Its decision comes days after official data showed the country had slipped back into recession in the six months to September - the second time in Prime Minister Shinzo Abe's near three-year premiership.
"We knew the BoJ wouldn't do anything," Seiichiro Iwamoto, a senior fund manager at Mizuho Asset Management Co, told Bloomberg News.
"Their policies are starting to have less and less of a positive effect on the real economy anyway. I don't hold any hopes for them." The yen strengthened after the news, having tumbled in New York after minutes from the Federal Reserve's October policy meeting suggested it will hike US interest rates next month.
The dollar slipped to 123.30 yen from 123.59 yen Wednesday in US trade. The greenback had already been softening as traders contemplated any rise in US rate would be small and slow.
Adding to confidence on trading floors was data showing Japan posted a surprise trade surplus in October, its first positive reading since March.
The surplus of 111.5 billion yen (S$1.28 billion), compared with a deficit of 741.76 billion yen a year ago, the finance ministry said. It also came despite the value of exports slumping for the first time since August last year.
In share trading, market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, tacked on 1.83 per cent to 48,350 yen.
Factory robotics maker Fanuc closed up 1.37 per cent to 22,055 yen, while electronics maker Fujitsu soared 3.69 per cent to 617 yen.