TOKYO: Tokyo shares opened higher Wednesday on rekindled hopes that the worst is over for the current wave of Covid infections, with the renewed optimism sending Wall Street to record finishes.
The benchmark Nikkei 225 index rose 0.17 percent, or 48.28 points, to 27,780.38, while the broader Topix index gained 0.21 percent, or 4.07 points, to 1,938.27.
The dollar stood at 109.73 yen, up from 109.66 yen in New York Tuesday.
The gains in early trade in Tokyo came after Wall Street shares firmed amid hopes that the United States is moving towards economic normalisation, as businesses report solid earnings and recent economic data suggests a brighter future ahead.
The S&P 500 and the Nasdaq both again marked record finishes, while the Dow also edged up 0.1 percent.
"The tide of optimism seems to have set in," with investors boosting US shares, oil prices and other commodities, said Tapas Strickland at National Australia Bank.
Players continued to cheer the full US regulatory approval given to the Pfizer/BioNTech vaccine, "paving the way for organisations to mandate vaccines for workers and thus lift vaccination rates higher," Strickland wrote in a note to clients.
The market also cheered as China seems to be controlling the Delta variant outbreak for now, he added.
Looking ahead, the market is starting to factor in the possibility of no major headlines from the much-anticipated Jackson Hole central banking conference, though investors will be watching Fed Chair Jerome Powell's speech on Friday, Okasan Online Securities said.
Tokyo shares are also benefiting from buybacks from investors who had dumped futures contracts on the expectation of gloomy times ahead, with the strength of US shares lifting sentiment in Japan, the brokerage added.
"Hopes for the peak of coronavirus infections and solid corporate earnings led to a rise in US bond yields, economically sensitive shares, and commodity prices in the US. It's a 'risk-on' market," Okasan Online Securities said in a note.
In Tokyo, major shares gained. Automobile-related issues firmed after a report that the government plans to increase subsidies for purchases of eco-friendly vehicles like electric and fuel-cell cars.
Denso, a major supplier of autoparts for Toyota, firmed 2.53 percent to 7,508 yen. Panasonic, which makes batteries for electric vehicles along with household appliances, also rose 2.19 percent to 1,281.5 yen.
Toyota added 2.44 percent to 9,498 yen while Nissan jumped 2.45 percent to 573.5 yen.
High-tech investor SoftBank Group firmed 2.46 percent to 6,331 yen. Uniqlo-operator Fast Retailing rose 0.54 percent to 73,860 yen.