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Tokyo's Nikkei surges 5% on weak yen, BoJ buying

Tokyo's key Nikkei stock index surged more than five percent on Tuesday, boosted by a weak yen and aggressive asset-buying from the Bank of Japan.

The Nikkei 225 shot up 5.09 percent, or 859.05 points, to 17,746.83 in mid-morning trade while the broader Topix index was up 2.29 percent, or 29.53 points, at 1,321.54.

"The dollar's overwhelmingly strong now," said Seiichi Suzuki, senior market analyst at Tokai Tokyo Research Institute.

The greenback was changing hands at 110.91 yen early Tuesday, down from 111.26 yen in New York on Monday afternoon but still sharply higher than 105-107 yen ranges seen a week ago.

A cheaper yen is good for Japanese exporters as it makes their products more competitive abroad while inflating profits when repatriated.

"Also investor sentiment has been supported by the Bank of Japan's buying of ETFs (exchange-traded funds)," he said.

Suzuki also noted overnight drops in New York were not as bad as expected.

Financial firms and energy companies that are heavyweights on the US Dow are not so prominent in Japan, he added.

Global equity markets had mostly tumbled Monday despite fresh stimulus announcements as the economic toll from the coronavirus continued to mount.

The US Federal Reserve unveiled a batch of additional aggressive measures to support the economy, but the boost was countered when divided politicians again failed to agree on key stimulus measures.

The Dow suffered another big drop, this time of 3.0 percent as the New York Stock Exchange completed its first all-electronic session in the wake of the crisis after the exchange suspended floor trading.

SoftBank Group kept soaring on a share-buyback scheme, gaining 20.08 percent to 3,827 yen after rising more than 18 percent on Monday.

Toyota gained 0.87 percent to 6,223 yen despite announcing temporary production suspension at five domestic plants to cope with slumping demand due to the coronavirus outbreak.

Public broadcaster NHK reported Toyota and major telecom group NTT would make a capital tie-up for a "smart city" project, putting up some 200 billion yen ($1.8 billion) each.

NTT was down 1.52 percent at 2,462 yen.

Toyota has said it will build a smart city at the foot of Mount Fuji.

Japan Post rose 4.35 percent to 807.9 yen on media reports that the group is planning to slash 10,000 or five percent of post office personnel.

Sony rose 1.77 percent to 5,970 yen and Canon gained 2.84 percent at 2,292.5 yen.

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