Tokyo: Shares advance on weakening virus fears, lower yen

[TOKYO] Tokyo shares closed higher on Wednesday on easing global worries about the coronavirus outbreak, while the yen's fall also encouraged investors.

The benchmark Nikkei 225 index added 1.02 per cent, or 234.97 points, to 23,319.56, while the broader Topix index rose 1.04 per cent, or 17.59 points, to 1,701.83.

Investors also cheered news that China might be considering more economic stimulus to ease the fallout from the virus, which has killed hundreds and infected more than 24,000 in China, with dozens more cases reported worldwide.

The Tokyo market started with healthy gains, benefiting from optimism fuelled by overnight rallies on Wall Street, where the Nasdaq index set another record high.

S&P Global Ratings said in a statement without a rating action on Wednesday that "while the situation is obviously a fluid one, our base-case projection is that the coronavirus crisis will stabilise globally in April 2020, with virtually no new transmissions in May".

"Our worst-case projection holds that the virus stops spreading in late May, and optimistically in March," it said, adding that the peak impact on economic activity across the Asia-Pacific will be in the first and second quarters.

"Growth should stabilise later in 2020 and recover through early 2021 as the temporary effect on activity wanes."

The Tokyo market stayed buoyant throughout the day, with the dollar standing at 109.39 yen, against 109.52 yen in New York.

"During the afternoon session, the yen's further fall as well as market gains made in Hong Kong and Shanghai encouraged investors," Okasan Online Securities said in a note to clients.

Among major shares, Toyota added 0.99 per cent to 7,715 yen. Nintendo rose 0.82 per cent to 40,430 yen.

Construction equipment maker Komatsu gained 1.00 per cent to 2,413 yen.

But Uniqlo-operator Fast Retailing gave up early gains to end down 0.28 per cent to 57,600 yen.

Sony fell 0.53 per cent to 7,659 yen.

AFP