TOKYO: Tokyo stocks soared 2.10 percent in Thursday morning trade after moves by major central banks to pump liquidity into the global financial system amid increasing worries over Europe's debt crisis.
The Nikkei 225 index at the Tokyo Stock Exchange rallied 177.39 points to 8,612.00 by the lunch break. The Topix index of all first-section issues rose 1.77 percent, or 12.92 points, to 741.38.
The market was reacting to a slew of positive news including the central bank action and China easing its credit controls, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.
"There were so many positive developments that I felt some of them might be better to be reserved for later," Takahashi told Dow Jones Newswires.
If Asian stocks remain firm, the Nikkei may rise to test the 8,700 level later in the session, he added.
"The Nikkei may be able to sustain gains through next week" unless there are disappointments from US non-farm payrolls data Friday and a European Union summit next week, he said.
Hideyuki Ishiguro, supervisor at investment strategy at Okasan Securities, said that the Nikkei was likely to remain steady.
"The downside risk has lowered as the correlation between the European sovereign-debt crisis and Japanese stocks appears to be weakening," he said, adding that "investors are noticing the affordability of Japanese stocks".
In a surprise move on Wednesday, central banks for the eurozone, the United States, Japan, Britain, Switzerland and Canada said that they would make cheaper US dollars available to liquidity-starved commercial banks.
The offering, aimed at helping strained European banks, is to last until February 2013 as part of a concerted effort to avert a depression and further social unrest that could be sparked by the eurozone debt crisis.
Markets also reacted as China said Wednesday it would cut the amount of money that banks must keep in reserve for the first time in three years to help boost lending and spur growth, amid signs of a domestic slowdown and slumping shipments to key export markets.
The move is the strongest signal yet that Beijing wants to ease tight credit restrictions put in place to curb surging inflation and property prices -- now showing signs of easing.
Shares in scandal-hit Olympus rose 5.36 percent to 1,080 yen by noon after ousted chief executive Michael Woodford quit the company's board but said he was working on a plan with shareholder groups to mount a comeback.
The euro traded at $1.3445 and 104.40 yen in Tokyo morning trade, up from $1.3438 and 104.25 yen in New York late Wednesday.
The dollar was at 77.65 yen, compared with 77.58 yen.
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