TOKYO: Tokyo stocks ended 0.44 percent higher Wednesday, reversing morning losses as the dollar pushed back above 114 yen after US Republicans took control of Congress and the head of the Bank of Japan vowed no let-up in tackling deflation.
The Nikkei index at the Tokyo Stock Exchange gained 74.85 points to 16,937.32, marking a five-day winning streak that has tacked on more than 10 percent. The Topix index of all first-section issues rose 3.11 points or 0.23 percent to 1,371.76.
The market spent much of the day in and out of negative territory after recent gains that were fuelled by the Bank of Japan's decision to expand its already huge stimulus programme.
But the index pushed north in the afternoon as the dollar broke to a seven-year-high 114 yen after news of the Republicans' capture of the Senate, which gives them control of Congress.
Also Wednesday BoJ boss Haruhiko Kuroda indicated the bank was prepared to do what was needed to hit a 2.0 percent inflation target by next year, suggesting further easing measures could be implemented.
"In order to completely overcome the chronic disease of deflation, medicine should be taken until the end," he told private and public-sector officials in Tokyo. "A half-baked medical treatment will only worsen the symptoms."
The dollar -- which stood at 113.57 yen early Wednesday in Tokyo -- jumped to 114.30 yen in the afternoon, its highest since December 2007. The euro was at 143.21 yen, against 142.61 yen earlier in the day.
The single currency was also at $1.2528 against $1.2545 in New York trade despite the European Commission's decision to cut its eurozone 2014 and 2015 growth forecasts.
Providing additional support to the stock market is a decision by Japan's public pension fund -- the world's biggest -- to double the amount of domestic and foreign equities in its investment portfolio.
"Last week's unexpectedly aggressive Bank of Japan easing action, combined with the Government Pension Investment Fund's stock-heavy allocation shift, has been a game-changer for equity markets, raising the floor for stock values," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
"(The) Nikkei downside is likely to be less pronounced going forward, with more investors -- including the government -- standing ready to buy on the dip," he told Dow Jones Newswires. (AFP)
