Japanese stock market soars to five-year high

Shares in Tokyo have soared, closing at their highest level in almost five years, with the market driven by a weakening Japanese currency and after Wall Street hit fresh all-time highs on solid jobs data.

The benchmark Nikkei 225 index gained 3.55 percent, or 486.20 points, to 14,180.24 on Tuesday, its best finish since June 2008.

Japan’s premier bourse has rocketed since late last year as Tokyo pledged to boost the world’s third-largest economy with a policy of big spending and aggressive central bank easing, which has helped push down the value of the yen.

That, in turn, tends to lift the local stock market as it makes exporters more competitive overseas and boosts the value of their repatriated foreign income, swelling profits.

Multinational companies such as Sony climbed 6.39 percent to 1,731 yen ahead of its full-year earnings later this week, while Canon was up 1.16 percent to 3,485 yen, and carmaker Nissan jumped 3.88 percent to 1,017 yen.

The yen has lost about one-fifth of its value against the dollar in recent months, with the US currency buying 99.05 yen in afternoon Tokyo deals on Tuesday.

It hit a record low of about 75 yen in late 2011, wreaking havoc on Japanese firms’ financial results.

US job report

Hirokazu Fujiki, strategist with Okasan Securities, credited Tuesday’s rally to “multiple positive factors ranging from gains in US stocks to a weak yen”, adding that investors are eyeing more full-year earnings results this week from giants including Toyota and the country’s major banks.

The European Central Bank cut key rates to an all-time low of 0.50 percent at a governing council meeting on Thursday, which ended after the Tokyo market closed for the holiday weekend.

Meanwhile, the US logged a surprisingly strong jobs report for April on Friday, boosting hopes for the world’s largest economy which has seen a mixed bag of indicators lately.

The US labour department reported that the economy added 165,000 jobs in April, and revised sharply upwards its numbers for the previous two months, helping to send the unemployment rate down to 7.5 percent.

US stocks closed mixed on Monday, with the broad-based S&P 500 edging up 0.19 percent to a new all-time closing high of 1,617.50 while the Dow Jones Industrial Average slipped 0.03 percent to 14,968.89.

On Tuesday, investors were also watching further news on North Korea after US defence officials said that the reclusive state had moved two missiles from launch sites on the country’s eastern coast.

The move could signal lowered tensions following worries that Pyongyang was ready to test-fire the weapons.