Tokyo stocks close up 2.05%

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TOKYO: Tokyo stocks jumped 2.05 percent on Tuesday as the dollar gained on the yen in afternoon trading, with the market also lifted by expectations of more policy easing by the Bank of Japan.

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The benchmark Nikkei 225 index, which had lost 15 percent in the past 10 days, closed 271.94 points higher at 13,533.76. The Topix index of all first-section shares was up 2.60 percent, or 28.52 points, at 1,125.47.

Tokyo won some support after Wall Street rebounded Monday from Friday’s steep losses despite weaker manufacturing data as well as a lower-than-expected reading on construction spending.

The Dow Jones Industrial Average rose 0.92 percent to finish at 15,254.03 with the poor data easing some concerns the Federal Reserve will cut its huge monthly asset purchases in the near term.

The greenback fell below 100 yen for the first time in nearly a month on Monday as the ISM purchasing managers’ index for May showed a surprise contraction.

In afternoon Tokyo forex trade, the dollar gained ground at 100.08 yen against 99.52 yen in New York late Monday, although it was down from its level of around 100.50 yen in Asia on Monday.

A strong yen is bad for Japanese exporters as it makes their products less competitive abroad while reducing the value of repatriated income.

The Tokyo market has seen wild volatility recently including a one-day plunge of 7.3 percent last month, the worst fall since Japan’s quake-tsunami disaster two years ago.

Some analysts have been predicting a sharp correction in the Nikkei, which surged about 80 percent over six months to above 15,000 before the recent downturn.

The rally was led by a sharply weaker yen, which has come in lockstep with economy-boosting plans from Prime Minister Shinzo Abe and his hand-picked team at the Bank of Japan.

The measures are aimed at reversing years of falling prices that have caused tepid growth in the world’s third largest economy.

A report in the leading Nikkei business daily said Japan’s central bank would discuss further easing measures.

“The story is far less about dollar-yen rates than of expectations for further Bank of Japan easing, which primarily impacts banks, brokers and real estate,” CLSA equity strategist Nicholas Smith told Dow Jones Newswires.

In Tokyo, Sony was up 3.66 percent at 2,009 yen, Canon rose 2.21 percent to 3,455 yen, Uniqlo clothing chain operator Fast Retailing gained 1.07 percent to 33,050 yen while brokerage giant Nomura jumped 7.60 percent to 778 yen.

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