Tokyo stocks open higher on cheaper yen

A pedestrian walks past an electronics stock indicator showing share prices on the Tokyo Stock Exchange (L) and New York Dow Jones closing numbers (R) in Tokyo on June 7, 2018. Tokyo’s benchmark Nikkei index rose for the fourth consecutive session on June 7, supported by a weak yen and Wall Street rallies. / AFP PHOTO / Kazuhiro NOGI

Tokyo stocks opened higher on Thursday supported by a cheaper yen, reflecting speculation about the European Central Bank’s possible movement towards ending its massive bond-buying programme.

The benchmark Nikkei 225 index rose 0.49 percent or 111.93 points to 22,737.66 in early trade while the broader Topix index was up 0.42 percent or 7.49 points at 1,785.08.

ECB policymakers will discuss at a meeting next week when to wind down their bond-buying spree that has propped up the eurozone economy for the past three years, a top official said Wednesday.

“As investors remain jittery over trade and tariffs, higher global bond yields on the hawkish ECB inference are driving financials higher,” Stephen Innes, head of currency trading for Asia Pacific at Oanda, said in a note to clients.

“And while interest rates are usually a negative for equity markets, investors are viewing higher interest rates in a favourable light,” he said.

The dollar weakened to 110.13 yen in early Asian trade from 109.79 yen reflecting expectations for the ECB’s policy normalisation, dealers said.

“Rallies on Wall Street and the dollar-yen that made a breakthrough at the 110 yen mark are supporting the Japanese stocks market,” Okasan Online Security said in a commentary.

In Tokyo, automakers were among gainers, with Toyota rising 1.36 percent to 7,576 yen, Honda trading up 1.05 percent at 3,547 yen and Nissan up 0.77 percent at 1,100 yen.

Sumitomo Metal Mining rallied 3.61 percent to 4,695 yen after a brokerage firm upgraded their estimate of the value of the shares.

Banks also gained, with Mitsubishi UFJ rising 2.25 percent to 688.1 yen and Sumitomo Mitsui Financial up 1.41 percent at 4,646 yen.

On Wall Street, the Dow and the Nasdaq closed at a record high for the third straight session after the ECB comments.

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