TOKYO: Tokyo stocks rose Monday morning to a 10-month high as the dollar soared against the yen on expectations the Federal Reserve will hike interest rates next month.
The dollar broke above 111 yen for the first time since June as traders bet on a rate hike next month and further increases over the next year to counter an expected surge in US spending and tax cuts under a President Donald Trump.
The weaker yen has proved a boon for Japan's exporters as it makes their goods cheaper overseas and boosts their repatriated profits.
In Tokyo, the benchmark Nikkei 225 index rose 0.49 percent, or 87.82 points, to 18,055.23 by the break, while the broader Topix index of all first-section issues was up 0.75 percent, or 10.67 points, at 1,439.13.
The dollar bought 111.02 yen in Tokyo, up from 110.90 yen in New York on Friday.
The surge in the dollar has also hit global bonds, with yields surging as investors move out of the safe-haven assets looking for better returns elsewhere.
"The high yield and weaker yen trend hasn't changed, and now those who were late in joining the buying spree will tag along," Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute, told Bloomberg News.
"At the bottom of all this, still, are expectations for US President-elect Trump," he said, referring to the tycoon's pledge to introduce huge stimulus for the economy.
Toyota rose 0.72 percent at 6,362.0 yen, with Sony up 1.48 percent at 3,283.0 yen and Hitachi also gaining 2.28 percent at 608 yen.
The finance ministry announced just before markets opened that Japan posted a second successive trade surplus, of 496.2 billion yen, in October.
Comments
Comments are closed for this article.