A pedestrian is watching the information of Tokyo's Nikkei Stock Average during the morning trade session in Tokyo, Japan, 4 November 2014. EPA/ Kimimasa Mayama
TOKYO: Tokyo's Nikkei 225 index ended at a fresh seven-year high on Tuesday in the wake of last week's surprise decision by the Bank of Japan to expand its asset-buying programme.
The benchmark Nikkei at the Tokyo Stock Exchange rose 2.73 percent, or 448.71 points, to 16,862.47, its best finish since October 2007, while the Topix index of all first-section issues gained 2.63 percent, or 35.01 points, to 1,368.65.
The rise came after a three-day long weekend with Japanese financial markets closed Monday for a national holiday.
"US markets' positive reaction (Friday) to the BoJ's announcement adds all the more fervour to suddenly bullish Japan stock enthusiasm," Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires.
On Friday, Tokyo shares soared 4.83 percent as the yen plunged after Japan's central bank ramped up its vast monetary easing programme with governor Haruhiko Kuroda saying Japan was at a "critical moment" in its war on deflation.
BoJ policymakers said they would step up the pace of the central bank's stimulus by as much as 20 trillion yen, bringing it to 80 trillion yen annually, as part of Tokyo's battle against falling prices and tepid growth.
Prime Minister Shinzo Abe told parliament on Tuesday that the market "largely welcomes" the BoJ's move, but he added that "we want to continue paying attention to consumption, which is showing weakness".
An April sales tax rise dented consumer spending and slammed the brakes on the wider economy, raising fears about plans for another levy hike next year.
The BoJ's stimulus ignited a rally on global stock exchanges, with the Dow surging 1.13 percent to a record high on Friday.
"The US reaction to the Kuroda bazooka was unexpectedly big," Hirokazu Kabeya, senior strategist at Daiwa Securities, said. "The yen's plunge also has a big impact.
"The BoJ endorsed a weak yen in a sense" by further easing its credit grip, he added.
The yen sank past 114 against the dollar on Monday, levels last seen in late 2007.
It clawed back some ground on Tuesday with the dollar at 113.33 yen, against its 113.99 yen close in New York Monday.
A weak yen is good for Japanese exporters as it makes them more competitive abroad and inflates their repatriated profits.
Sony jumped 11.05 percent to 2,301.0 yen and Panasonic soared 5.97 percent to 1,383.0 yen, while Sharp was up 2.55 percent at 281.0 yen and camera maker Olympus rose 5.36 percent to 4,125.0 yen.
Brokerage Daiwa Securities soared 12.27 percent to 966.7 yen while investment bank Nomura rose 7.71 percent to 727.0 yen. (AFP)
