Tokyo stocks up 1.21 percent by noon

TOKYO: Tokyo stocks rose 1.21 percent Monday morning amid easing pessimism over Europe's debt crisis as former EU commissioner Mario Monti was nominated to head a new Italian cabinet.

The Nikkei 225 index at the Tokyo Stock Exchange gained 102.80 points to 8,617.27 by the lunch break. The Topix index of all first-section issues added 0.90 percent, or 6.56 points, to 735.69.

The nomination of Monti as Italy's new prime minister gave rise to hopes that the new government will help the country implement key economic reforms.

"Excessive pessimism about European conditions has temporarily subsided, but the situation does not yet allow us to be wildly optimistic," Yutaka Miura, a senior technical analyst at Mizuho Securities, told Dow Jones Newswires.

Yutaka Yoshii, a general manager at Mito Securities, said: "Nobody is trading on the premise that concerns in Europe have been eradicated."

Just before the opening bell, government data showed Japan's economy grew by an annualised 6.0 percent in the July-September quarter, the first gain since March's earthquake and tsunami disaster and the first growth in four quarters.

"While there are concerns of an economic slowdown across the globe, there is some temporary relief that Japan's July-September GDP is better than other developed economies," said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.

"But uncertainty for the October-December period remains strong," he added. Many economists have warned about Japan's outlook with the strong yen and the slowing global economy hurting its exports.

Miura of Mizuho Securities said investors would continue to watch a batch of US economic data due this week and further developments with new governments in Greece and Italy vowing to rein in their nations' crippling debt.

Financials led the gains, with Nomura Holdings soaring 4.93 percent to 255 yen and Sumitomo Mitsui Financial Group up 2.96 percent to 2,082 yen.

Sony climbed 2.21 percent to 1,384 yen in the wake of a $2.2 billion deal to buy EMI's music publishing operation.

The euro bought $1.3769 and 106.29 yen in Asian morning trade, up from $1.3739 and 105.97 yen in New York late Friday. The dollar was at 77.17 yen, compared with 77.12 yen in New York.

US stocks jumped about two percent Friday after positive moves in Europe.

Italy's Senate approved a round of economic reforms while Greece's new unity government was sworn in to ratify the crucial EU bailout. In Portugal, lawmakers gave preliminary approval to the government's 2012 austerity budget.

Copyright AFP (Agence France-Presse), 2011