Tokyo stocks close 1.90% higher

Tokyo stocks rose 1.90 percent Thursday as the yen fell on expectations Japan's premier will be unseated in elections next month by a business-friendly challenger who wants "unlimited" central bank monetary easing.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange added 164.99 points to 8,829.72 in heavy trade, while the broader Topix index of all first-section shares rose 2.09 percent, or 15.10 points, to 737.51.

However, Sony plunged 8.85 percent to 793 yen after the troubled electronics maker announced it would issue convertible bonds worth 150 billion yen ($1.9 billion), sparking dilution fears.

The Tokyo market's rise was fuelled by dealers betting that opposition leader Shinzo Abe would topple Prime Minister Yoshihiko Noda and his centre-left Democratic Party of Japan at polls set for December 16, analysts said.

Abe's stance in favour of looser monetary policy to reach a 2-3 percent inflation target -- and vow to strike an agreement with the central bank over further easing -- helped weaken the yen and lift shares.

A strong yen hurts Japanese exporters as it makes their products less competitive overseas and erodes the value of repatriated foreign income.

"Only by implementing unlimited easing to achieve this target will the market show reaction," Abe said in a speech in Tokyo.

"If we come into power, we will implement bold monetary easing through an accord forged with the Bank of Japan," he added.

CLSA equity strategist Nicholas Smith said: "The market is salivating over the free money that implies."

But Investrust CEO Hiroyuki Fukunaga cast doubt on the plan, saying "US-style 'unlimited' easing is not going to be possible" in Japan.

"Banks still won't have anybody to lend the money to, so most of the extra liquidity will end up buying bonds.

"And interest rates can hardly come down much more than they already have, making the stock market reaction today look a bit impulsive," he told Dow Jones Newswires.

The central bank, whose main policy tool is a 91 trillion yen asset-buying programme, has held firm on rates, keeping them at between zero and 0.1 percent.

In Tokyo trade, construction giant Kajima rose 6.42 percent to 232 yen and Nippon Steel & Sumitomo Metal gained 4.81 percent to 174 yen on hopes for higher public works spending by a new government.

Toyota Motor was up 5.06 percent at 3,215 yen, despite saying Wednesday it would recall 2.77 million vehicles over some defects, while camera maker Canon gained 4.59 percent to 2,549 yen.

Japan's megabanks -- Mitsubishi UFJ, Mizuho Financial Group and Sumitomo Mitsui Financial Group -- all rose more than 3.0 percent, even after releasing lacklustre earnings results on Wednesday.

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Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.25810.000.00%
    USDSGD=X
    1.7401-0.00010.00%
    EURSGD=X
    2.1137-0.00010.00%
    GBPSGD=X
    81.2893-0.00280.00%
    SGDJPY=X
    6.16270.000.00%
    SGDHKD=X
    2.59840.000.00%
    SGDMYR=X
    9,256.0225-0.00390.00%
    SGDIDR=X
    4.96690.000.00%
    SGDCNY=X
    1.1654+0.0002+0.01%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,293.50+2.90+0.22%
    GCM14.CMX
    19.690.00+0.01%
    SIK14.CMX
    91.62-1.25-1.35%
    ^XAU
    3.12-0.01-0.16%
    HGK14.CMX
    101.91-0.03-0.03%
    CLM14.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.74+0.03
    ^FVX
    2.690.00
    ^TNX
    3.460.00
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.123+0.001+0.82%
    B22.SI
    0.15+0.008+5.63%
    545.SI
    0.635+0.040+6.72%
    5WH.SI
    0.615+0.005+0.82%
    E5H.SI
    1.355+0.005+0.37%
    G13.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    20.00+4.200+26.58%
    K6S.SI
    1.215+0.190+18.54%
    S53.SI
    0.415+0.045+12.16%
    570.SI
    1.345+0.130+10.70%
    5DA.SI
    0.154+0.014+10.00%
    5GD.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.053-0.059-52.68%
    5TF.SI
    1.62-0.520-24.30%
    N02.SI
    0.20-0.020-9.09%
    E94.SI
    0.179-0.013-6.77%
    567.SI
    0.30-0.020-6.25%
    508.SI