TOKYO: Tokyo stocks rose 0.83 percent Thursday as investors cheered a last-minute deal to reopen the US government and avoid a catastrophic debt default.
The benchmark Nikkei 225 index gained 119.37 points to 14,586.51, while the Topix index of all first-section shares added 0.79 percent, or 9.47 points, to 1,206.25.
"Approval of the debt deal eliminates uncertainties, which is good for the market," said Keisuke Shirasuka, chief fund manager at Mitsubishi UFJ Asset Management.
Tokyo got a strong lead from Wall Street where the Dow rallied 1.36 percent to 15,373.83 on news that US lawmakers had reached a last-minute deal to end the two-week government shutdown and raise the US debt ceiling.
That was followed by Congress passing the bill late Wednesday, averting a debt default.
Investors breathed a sigh of relief as Republican and Democratic senators reached the compromise budget after weeks of bitter debate on Capitol Hill that called into question Washington's credibility with its international creditors, including China and Japan.
Global markets had been on tenterhooks over the crisis, which saw Democrats refuse to give in to Republican demands for a new budget to include cuts to President Barack Obama's flagship healthcare bill.
But with just hours to go before a Thursday deadline to raise the debt ceiling, Senate party leaders reached an agreement to reopen a government that was shut down on October 1, while extending the debt ceiling until the new year.
However, some analysts noted that Wednesday's agreement was only a temporary solution.
"The US budget/debt ceiling drama appears over for now," Credit Agricole said.
"We have a short-term extension but will likely be in a similar 'crisis' situation early next year... It's hard to be optimistic on any easy solution in the negotiations that will take place over the next few months."
Nissan finished the day up 2.20 percent to 1,022 yen and Honda gained 1.15 percent to 3,950 yen. Toyota slipped 0.31 percent to 6,340 yen.
Sony rose 0.20 percent to 1,938 yen, Canon added 0.32 percent at 3,120 yen, while Panasonic fell 1.58 percent to 932 yen.
On currency markets, the dollar rallied to 99 yen in Tokyo morning trade from 98.79 in New York Wednesday before settling back to 98.45 yen by the afternoon. (AFP)
