TOKYO: Tokyo stocks rose 1.37 percent on Friday, as a weakening yen helped the benchmark index rebound from the previous day's plunge of more than five percent.
The headline Nikkei 225 index added 185.51 points to 13,774.54, while the Topix index of all first-section shares edged 0.12 percent, or 1.36 points, higher to 1,135.78.
The drop Thursday followed a week of wild volatility on the Tokyo market which included a jaw-dropping plunge of 7.3 percent, the worst single-day fall since Japan's 2011 quake-tsunami disaster.
Some analysts have been predicting a sharp correction in the Nikkei which had surged nearly 60 percent over the past six months.
Tokyo has emerged as one of the world's top-performing bourses after Prime Minister Shinzo Abe came to power in December with his pro-spending policies and prescription for aggressive central bank easing which pushed down the yen.
A weaker currency makes Japanese exporters more competitive overseas and inflates their repatriated foreign income which, in turn, tends to lift their shares.
"Investors on the sidelines should regard this as a great entry point, including domestic funds," CLSA equity strategist Nicholas Smith told Dow Jones Newswires.
Investor sentiment was buoyed by official data released Friday that showed Japanese factory output expanded by a better-than-expected 1.7 percent on-month in April, even as the nation remained mired in deflation.
In forex trading, the dollar fetched 101.01 yen in Tokyo afternoon trade from 100.74 yen in New York late Thursday, while the euro also strengthened to 131.65 yen from 131.39 yen.
The dollar-yen pairing has moved in virtual lockstep with the Tokyo stock market, something of a chicken-and-egg relationship where analysts struggle to agree on which is causing the other to move.
But the pair are closely linked as the yen's value directly affects Japan's powerhouse export sector.
Sony jumped 2.09 percent to 2,049 yen after business news channel CNBC reported it has hired investment banks to review a shareholder proposal to spin off a part of its profitable music and movie division.
Panasonic fell 1.86 percent to 789 yen after the struggling Japanese electronics giant said Thursday it was aiming to cut about 5,000 jobs over three years in its automotive and industrial systems unit.
In New York the Dow Jones Industrial Average added 0.14 percent to 15,324.53 on Thursday as weaker-than-expected economic news fuelled hopes the Federal Reserve will continue to keep its foot on the stimulus pedal. (AFP)
