Tokyo shares up by break on lower yen

Tokyo stocks rallied Friday morning as the yen sank against the dollar after Federal Reserve chief Janet Yellen indicated the bank would hike US interest rates next month.

The dollar soared Thursday after Yellen told a joint congressional committee of her confidence in the state of the US economy.

She said a rate hike would become appropriate "relatively soon", reinforcing the market's belief that the Fed will increase the key interest rate next month, 12 months after its last hike.

"I do think that the economy's making very good progress toward our goals," she said.

The dollar rose to 110.70 yen in Tokyo, sharply up from the levels around 109 yen seen a day earlier, with strong readings on jobless claims, inflation and housing starts helping the buying spree.

A weaker yen is good for Japanese exporters by making their products more competitive overseas, while increasing the value of their repatriated foreign income.

The benchmark Nikkei 225 index rose 0.84 percent, or 149.16 points, to 18,011.79 by the break, while the broader Topix index of all first-section issues added 0.57 percent, or 8.11 points, at 1,431.19.

Traders also cheered a meeting between US President-elect Donald Trump and Japanese Prime Minister Shinzo Abe in New York.

Abe said his meeting with Trump -- the first by a foreign leader -- convinced him the US president-elect was someone "in whom I can have great confidence".

The Japanese leader gave few details of the meeting but added the two agreed to meet again for deeper talks on a wider range of issues.

"The cheaper yen obviously is having great impact on the market, but the Abe-Trump meeting ... seems to have been a success and that's also welcomed by the market," said Hiroaki Hiwata, strategist at Toyo Securities.

Japan is one of Washington's closest allies but Trump alarmed Tokyo during the election campaign by musing about pulling the thousands of US troops from the region and suggesting that the pacifist country develop its own nuclear weapons.

Trump also vowed during the election to tear up the Trans-Pacific Partnership (TPP), a vast trade pact backed by outgoing President Barack Obama and which Abe had made a top priority.

-- Bloomberg News contributed to this report --

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