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Tokyo: Stocks open up 0.23%

[TOKYO] Tokyo stocks opened 0.23 per cent higher on Wednesday, supported by the yen's further drop against the dollar and record closes on Wall Street.

The Nikkei 225 index, which turned up more than two per cent on Tuesday after tumbling a day earlier, gained 40.25 points to 17,384.31 at the start.

The higher opening at the Tokyo Stock Exchange came after the dollar rose to 117.14 yen early Wednesday from 116.83 yen in New York Tuesday afternoon and 116.57 yen in Tokyo earlier Tuesday.

A weak yen is positive for Japanese exporters as it makes them more competitive abroad and increases profits when repatriated.

The market remained solid after Prime Minister Shinzo Abe on Tuesday called for early elections to seek a mandate for delaying next year's sales tax increase and his economic policies.

"Abe's actions were in line with market expectations, which had been building for several days," said Eiji Kinouchi, chief technical strategist at Daiwa Securities. "Historically, the market tends to rise between the time elections are declared and when the vote actually occurs, and foreign investors, importantly, appear to be embracing the decision." Many analysts expect the election to take place around December 14.

Shares in Takata rose 0.50 per cent to 1,193 yen in the first few minutes of trade despite US safety regulators pushing for a nationwide recall of cars with defective Takata air bags.

An earlier recall limited to several mostly southern US states needed to be expanded to the full country, said David Friedman, deputy administrator of the National Highway Traffic Safety Administration.

A Takata spokesman in Tokyo said the head office was checking whether the company had received a formal US order for a nationwide recall.

On Wall Street on Tuesday, the Dow Jones Industrial Average climbed 0.23 per cent and the S&P 500 rose 0.51 per cent to close at fresh records following solid economic data from Germany and the United States.

AFP