By Peter Masheter,
The Nikkei stock index soared Wednesday, ending at a nearly 34-year high for a second consecutive day, as the yen's weakness against the U.S. dollar sparked aggressive buying of exporters.
The 225-issue Nikkei Stock Average finished up 678.54 points, or 2.01 percent, from Tuesday at 34,441.72, marking its highest close since February 1990 when Japan was experiencing an asset price bubble. It was the largest point gain since Nov. 15.
The broader Topix index finished up 31.39 points, or 1.30 percent, at 2,444.48, its highest close since March 1990.
On the top-tier Prime Market, gainers were led by precision instrument, pharmaceutical and electric appliance issues.
The dollar briefly rose above the 145 yen line in Tokyo trading on receding expectations that Federal Reserve rate cuts could come as soon as March, narrowing the interest rate differential between Japan and the United States.
At 5 p.m., the dollar fetched 144.93-95 yen compared with 144.42-52 yen in New York and 144.06-07 yen in Tokyo at 5 p.m. Tuesday.
The euro was quoted at $1.0926-0927 and 158.36-40 yen against $1.0926-0936 and 157.88-98 yen in New York and $1.0956-0957 and 157.84-88 yen in Tokyo late Tuesday afternoon.
The yield on the benchmark 10-year Japanese government bond ended at 0.585 percent, up 0.005 percentage point from Tuesday, as investors sold the debt after a 10-year bond auction by the Finance Ministry met with tepid demand. Bond yields move inversely to prices.
The stock market surged from the start of regular trading as recent movements in the yen have strengthened investor confidence, alleviating concerns from late last year that the Japanese currency might significantly impact exporters' profits.
A weaker yen boosts profits earned overseas when repatriated and strengthens the price competitiveness of Japan-made products abroad.
Active buying back of autos, electronics and other exporters followed strong gains in the technology sector on Tuesday when the Nikkei gained more than 1 percent.
"With the yen showing a weakening trend now and the sense that the Nikkei was behind (other markets), we're seeing a response to that today with equities," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.
The Tokyo stock market failed to keep pace with the strong gains in the U.S. market late last year.
In addition to gains from exporters, modest rises in U.S. tech shares overnight supported their Japanese counterparts.
Among exporters, Toyota Motor advanced 51.0 yen, or 1.9 percent, to 2,745.0 yen, and construction machinery manufacturer Komatsu climbed 71 yen, or 1.9 percent, to 3,850 yen.
Tech and precision instrument shares were higher, with Olympus gaining 117.0 yen, or 5.7 percent, to 2,176.0 yen and Tokyo Electron rising 475 yen, or 1.9 percent, to 25,385 yen.
Elsewhere, pharmaceutical firm Eisai finished up 309 yen, or 4.3 percent, at 7,574 yen, following news Tuesday its Alzheimer's disease treatment was approved in China, with preparations for a launch between July and September now underway.
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