TOKYO: Tokyo stocks rose on Monday, extending a 10-month high as the yen remained under pressure on market expectations for a US interest rate hike next month.
The key Nikkei index ploughed through the psychologically important 18,000 mark and is extending its best levels since early January.
Higher US rates are likely to increase the gap between the dollar and the yen as Japan's are expected to remain low.
A weaker yen is positive for Japanese stocks as investers scoop up shares in exporters that benefit from their products being cheaper overseas and an increase in the value of repatriated profits.
Federal Reserve chair Janet Yellen said last week that a rise would be appropriate "relatively soon", leading market sentiment that the Fed will move in December.
Her remarks came amid strong data showing 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.
The benchmark Nikkei 225 index rose 0.39 percent, or 70.68 points, to 18,038.09, while the broader Topix index of all first-section issues was up 0.49 percent, or 7.03 points, at 1,435.49.
The dollar, meanwhile, was at 110.77 yen in early morning trade in Tokyo, up from 110.63 yen in London and 110.70 yen in Tokyo on Friday.
"The undercurrent in the market is still expectations for Mr Trump," Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute, told Bloomberg News, referring to speculations that the US president-elect will introduce stimulus measures.
"The trend of high interest rates and a cheaper yen remains unchanged, and those who have failed to buy into this rapid surge (in share prices) will be there," he said.
Separately, the finance ministry announced just before markets opened that Japan posted a trade surplus of 496.2 billion yen ($4.47 billion) in October, the second straight monthly surfeit, though smaller than expected as yen strength during the month dented exports.
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