Tokyo stocks close higher on US economic hopes

 06 Feb 2017 - 10:38

Tokyo stocks close higher on US economic hopes


Tokyo: Tokyo stocks closed higher Monday with investors buoyed by solid US job growth while banks rallied on President Donald Trump's move to roll back financial regulations.

US non-farm payrolls for January came in above forecast at 227,000 new jobs on Friday, with hiring up in retail, construction and the financial sector, the Labor department said.

That came as Trump ordered a review of key reforms enacted after the 2008 financial crisis, in the first step towards scaling back toughened regulations on the banking industry. 

In Tokyo, the benchmark Nikkei 225 rose 0.31 percent, or 58.51 points, to 18,976.71, while the Topix index of all first-section issues was up 0.36 percent, or 5.43 points, at 1,520.42.

The Nikkei's advance came despite the dollar dipping to 112.49 yen from 112.61 yen in New York.

"With construction work acting as a boost, the pace of recovery in the US economy is quickening," said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute.

"The easing of financial regulations in the US is likely to work in Japanese financials' favour as well," he told Bloomberg News.

Japanese mega-banks jumped with Mitsubishi UFJ Financial up 3.38 percent at 754.7 yen and Sumitomo Mitsui Financial rising 1.63 percent to 4,485 yen.

Top brokerage Nomura climbed 1.22 percent to 741.2 yen.

Auto giant Toyota ended up 0.74 percent at 6,493 yen while Suzuki fell 0.48 percent to 4,476 yen just before the two companies announced they would begin detailed discussions on a business partnership.

Honda jumped 2.04 percent to 3,493 yen after it revised up its full-year outlook thanks to a weaker yen.

But Takata, which is at the centre of the biggest-ever auto safety recall, plunged by its daily limit of 18.65 percent to 436 yen.

The dive came after a weekend report that Key Safety Systems, a US company acquired by China's Ningbo Joyson Electronic last year, has been selected as the favoured candidate to help rehabilitate the troubled airbag maker.

Automakers, among Takata's largest creditors, expressed support for the pick on the condition that Takata pursues a court-mediated turnaround in both Japan and the United States, the Nikkei business daily said.

Takata said the company had received "a recommendation of Key Safety Systems by the committee" tasked with drafting a turn-around plan, but had not made a decision yet on details.

"Investors are worried about court-controlled restructuring" rather than Key Safety Systems, said Hideyuki Suzuki, head of investment information at SBI Securities.