Tokyo stocks at 10-month high

Tokyo stocks rallied Friday as the yen sank against the dollar on expectations for a US rate hike next month, with the benchmark index hitting a 10-month high and putting it in a bull market. Dealers cheered comments from Federal Reserve boss Janet Yellen that virtually guaranteed the US central bank will hike interest rates in December.
Those hopes were bolstered as weekly new jobless claims hit a 43-year low, the consumer price index posted its strongest gain in six months and monthly housing starts increased. On Thursday Yellen a rise would be appropriate "relatively soon". The dollar jumped to five-month highs of 110.70 yen, sharply up from the levels around 109 yen seen a day earlier. "With the yen trading around 110 to the dollar, investors will naturally anticipate an improvement in corporate earnings for Japan," Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.
A weaker yen is good for Japanese exporters as it makes them more competitive overseas, while inflating the value of repatriated profits. Tokyo's headline Nikkei 225 gained 0.59 percent, or 104.78 points, to end the day at 17,967.41, a whisker below the psychologically key 18,000 mark and its best level since early January. The index gained 3.4 percent over the week and is now in a bull market, a 20 percent rise from its recent lows seen in June. The broader Topix index of all first-section issues was up 0.38 percent, or 5.38 points, at 1,428.46, after rising 3.6 percent in the past week.
Traders also gave a thumbs up to a meeting between US President-elect Donald Trump and Japanese Prime Minister Shinzo Abe in New York. Abe said his meeting with Trump - the first by a foreign leader - convinced him the US president-elect was someone "in whom I can have great confidence". "The cheaper yen obviously is having great impact on the market, but the Abe-Trump meeting ... seems to have been a success and that's also welcomed by the market," said Hiroaki Hiwata, strategist at Toyo Securities.
The Japanese leader gave few details of the encounter but added the two agreed to meet again for deeper talks. Honda rose 0.98 percent to 3,187 yen and Nintendo jumped 2.93 percent to 26,815 yen. Heavyweight Fast Retailing, the operator of Uniqlo clothing chain, ended up 2.31 percent at 40,190 yen and mobile carrier SoftBank gained 0.62 percent to 6,775 yen.