TOKYO: Tokyo stocks opened more than three percent higher Monday on the back of a weaker yen and after modest US jobs data boosted hopes that the Federal Reserve will not reel in its stimulus programme.
The benchmark Nikkei 225 index, which lost 6.5 percent last week, was up 3.30 percent to 13,302.75 in the first few minutes of trading.
The early gain came after the yen weakened sharply following the release of data that showed the United States continues to add jobs, but not enough to stoke investor concerns that the Fed will pull back on its easy-money policies.
“The (jobs) figures were moderate, which reduced concerns over the Fed’s reeling in its bond-buying programme soon,” said Kenji Shiomura, strategist at Daiwa Securities.
“The yen dropped as risk aversion receded,” Shiomura said.
The Labor Department said Friday that 175,000 jobs were generated in May, better than pessimistic expectations, but still only at the same moderate pace of the past year.
“The US employment data had been fretted over for the last several days; now that it’s out and fears over the end of Fed ‘tapering’ have subsided, the market can begin to resume its upward trajectory,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
The dollar stood at 98.25 yen in Tokyo early trade, compared with 97.56 yen in late Friday in New York and 96.44 yen in Asian trade on Friday. The greenback at one point sunk below 96 yen Thursday.
“After several days of corrections, fundamental stock valuations are signalling ‘buy’,” Nishi told Dow Jones Newswires.
The Dow Jones Industrial Average closed up 1.38 percent to 15,248.12 on Friday as the broad-based S&P 500 added 1.28 percent to 1,643.38.