Japanese shares surge 2.01pc on weaker yen

TOKYO: Japanese shares jumped 2.01 percent Thursday, following gains in US and European markets, as investors cheered the yen's weakness against the dollar.

The headline Nikkei index at the Tokyo Stock Exchange surged 192.90 points to 9,768.96. The Topix index of all first-section issues rose 1.63 percent or 13.45 points to 836.16.

Sentiment in Tokyo brightened as the yen continued to weaken after Japan posted a record current account deficit in January, at 437.3 billion yen ($5.4 billion).

Its first current account deficit in three years came as a sharp rise in the total value of imports, boosted by the high cost of energy, overwhelmed struggling exports.

The yen stood at 81.30 to the dollar in Tokyo, slipping from 81.03 in New York.

The euro rose to $1.3177 and 107.14 yen, compared with $1.3148 and 106.67 in New York.

A lower yen helps Japanese exporters, the nation's main economic engine, by making their products less expensive abroad and by boosting the value of their overseas revenues when repatriated.

"These days, the dollar/yen and the Nikkei show increasingly similar moves," said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.

Solid US jobs data and a belief that Greece's creditors are close to agreeing a deal to write down more than half their bond holdings, which would help Athens avoid a default, lifted global sentiment, analysts said.

On Wall Street the Dow Jones Industrial Average gained 0.61 percent, while the broad-based S&P 500 added 0.69 percent and the tech-rich Nasdaq rose 0.87 percent.

Broad advances in Asian markets also helped boost the Nikkei, said Hiroichi Nishi, general manager of the equity division at SMBC Nikko Securities.

"Gains in the euro are raising expectations for a smooth implementation of

the Greek debt swap" later in the global day, Nishi also told Dow Jones Newswires.

Among major shares, Honda Motor added 2.01 percent to 3,035 yen, Sony rose 0.61 percent to 1,648 yen and Advantest surged 4.36 percent to 1,123.

Mizuho Financial Group rose 2.27 percent to 135 yen.

Copyright AFP (Agence France-Presse), 2012