Tokyo’s Nikkei Index has closed at a six-year high on news the US Federal Reserve will begin tapering its stimulus program.
Tokyo shares have closed at a fresh six-year high after the US Federal Reserve said it would start scaling back its bond-buying program from next month, citing a pick-up in the world’s No.1 economy.
The benchmark Nikkei on Thursday was up 1.74 per cent, or 271.42 points, at 15,859.22, its best finish since December 2007.
The Topix index of all first-section shares added 1.01 per cent, or 12.58 points, to 1,263.07.
“The taper decision is naturally a plus for Japanese stocks,” said Kenji Shiomura, market analyst at Daiwa Securities. “Interest rates continue to be stable while the yen is lower.
“Positive factors are lined up for Japanese stocks,” he added, noting the market was bullish enough to surge even after a two per cent advance the previous day.
The gains mirrored a rally on Wall Street, where the Dow and S&P 500 posted new records after the Fed said it would cut its stimulus program next month, giving a vote of confidence to the US economy and jobs market.
After a two-day meeting, policymakers said the bank will buy $US75 billion of bonds each month from January – down from the $US85 billion it has spent monthly since unveiling the scheme in September last year – citing a string of upbeat data indicating the world’s top economy is strengthening.
It said it would likely take “further measured steps at future meetings” if the economy continues to improve while keeping interest rates a record lows “well past the time” the unemployment rate declines below 6.5 per cent – its previous cut-off point before tightening monetary policy.
On currency markets, the US dollar rallied, hitting new five-year highs in New York after the Fed announcement, peaking at Y104.36 at one point – up from levels below Y103 earlier in Tokyo – before settling at Y104.13. In afternoon Asian trade on Thursday, it fetched Y104.00.
The weak yen boosted export-focused Japanese firms, with Panasonic up 2.53 per cent at Y1,213, Nikon gaining 1.18 per cent to Y1,967 and Mitsubishi UFJ, Japan’s biggest bank, 1.69 per cent higher at Y660.
Shares in Ohsho Food Service bucked the trend, falling 3.53 per cent to Y3,000 on news that the well-known dumpling restaurant chain’s charismatic boss was shot dead on Thursday.
Takayuki Ohigashi, 72, was found bleeding and unconscious in a parking lot in front of the company’s headquarters in Kyoto about 7.00am, the firm said.
He was later confirmed dead at hospital.