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Tokyo: Stocks open higher after US rebound

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[TOKYO] Tokyo stocks opened higher Wednesday, supported by a rebound on Wall Street and a weaker yen, despite a ratcheting-up in rhetoric over a US-China trade war.

The benchmark Nikkei 225 index rose 0.46 per cent or 96.98 points to 21,389.27 in early trade, while the broader Topix index was up 0.25 per cent or 4.34 points at 1,708.14.

"Japanese stocks are likely to test a rebound as sentiment has improved after sharp rebounds in US shares and the yen's drop to the mid-106 range," Okasan Online Securities said in a commentary.

The US dollar was trading at 106.55 yen against 106.60 yen in New York on Tuesday, rising from levels below 106 seen a day earlier.

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A weak yen is positive for Japanese exporters as it inflates their earnings.

Masayuki Kubota, chief strategist at Rakuten Securities, said it was "time to buy Japanese stocks for long-term investment" while being on guard against risks in the immediate future.

Investors need to watch out for risks from US-China trade frictions, criticism of Facebook and other IT giants and the yen's appreciation as well as domestic and regional politics, he said in a report.

China on Wednesday strongly condemned a US list of US$50 billion in Chinese imports set to be hit by tariffs and warned it was ready to retaliate.

However on Tuesday Wall Street stocks bounced back from the previous day's rout as tech shares gained.

In Tokyo trade, Honda rose 0.55 per cent to 3,635 yen on the weaker yen and robust US sales results for March.

Market heavyweight Fast Retailing, the operator of Uniqlo clothing chain, rose 2.75 per cent to 45,110 yen.

Sony was up 1.47 per cent to 5,226 yen after it announced its wholly owned Sony Music Entertainment had sold part of its equity stake in Spotify on its stock debut.

The combined sum of gains from the sale and book value appreciation was about US$1 billion based on the sale price and Tuesday's market closing price.

Sony Music had a 5.7 per cent equity stake when the music streamline giant soared to a value of more than US$26 billion in its long-awaited stock debut in New York.

AFP