TOKYO: Tokyo stocks jumped 2.73 percent on Monday as a weakening yen drew investors who scooped up shares following weeks of wild volatility on Japan's premier exchange.
The benchmark Nikkei 225 index ended up 346.60 points to 13,033.12, while the Topix index of all first-section shares climbed 2.68 percent, or 28.27 points, to 1,084.72.
Yen trading and the Tokyo market are closely interlinked as the value of the currency affects the profitability of Japanese exporters.
In afternoon forex trade, the dollar bought 94.95 yen against 94.22 yen in New York late Friday.
"Sometimes it's difficult to perceive whether stocks are affecting currencies or currencies are affecting stocks, but today it was likely the former," said Tachibana Securities market advisor Kenichi Hirano.
Major exporters gained with Sony up 1.40 percent to 1,950 yen, Canon rising 1.12 percent to 3,160 yen, Toyota jumping 1.96 percent to 5,700 yen and Tokyo Electric Power gaining 1.48 percent to 547 yen.
Investors are keeping a close eye on a two-day US Federal Reserve meeting that starts Tuesday as markets search for clues about when it will taper off its massive bond-buying scheme.
The meeting comes after US economic data last week cast doubt on the strength of recovery in the world's biggest economy, a crucial factor in the timing for the Fed to cut back on its $85-billion-a-month stimulus.
Industrial production came in flat last month, there was a decline in the closely watched University of Michigan consumer sentiment index, and producer prices registered just a modest gain in May.
Growth remains too tepid for the Federal Reserve to start unwinding the scheme, analysts said, with most discounting the idea it would announce such a move on Wednesday.
"The data coming in are up and down, and unconvincing that the US economy is on a firm recovery track, leading to more jitters about central bank policy," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
The Dow Jones Industrial Average closed down 0.70 percent at 15,070.18 on Friday, reacting to the downbeat data and caution ahead of the Fed's meeting. (AFP)
