Tokyo - Tokyo stocks ended 2.02 percent higher on Wednesday as the yen weakened hours before the US Federal Reserve makes an announcement on stimulus programme.
The benchmark Nikkei 225 index added 309.17 points to 15,587.80, while the Topix index of all first-section shares rose 1.48 percent, or 18.18 points, to 1,250.49.
Investors have been focused on the Fed's policy committee meeting that wraps up later in the day, with opinion split on whether or not it will announce a wind-down of its $85 billion a month bond-buying programme.
While some analysts expect a wind-down immediately other suggest it might wait until early in the new year as fourth-quarter data flows in.
“Whether the Fed takes its foot off the (monetary easing) pedal tonight or in January is probably a moot point... as the bottom line is that tapering is very much going to happen and markets will need to adjust sooner rather than later,” Credit Agricole said.
With US November housing starts figures also set to be released Wednesday, dealers are keeping a close eye on statements from Fed chief Ben Bernanke about US economic conditions and any move on interest rates.
Markets have been see-sawing ahead of a decision on the stimulus, which has been credited with buoying global equity markets since the end of last year.
“After any (policy meeting) outcome, how Japan is going to navigate its monetary policy will be the key,” Chibagin Asset Management general manager of research Yoshihiro Okumura told Dow Jones Newswires.
A pullback on the Fed's stimulus is seen as likely to boost the dollar further against the yen, which is good for Japanese exporters, while speculation over a further easing of the Bank of Japan's own policy is also weighing on the unit.
Tokyo share prices got a lift from speculation that Prime Minister Shinzo Abe will supply further details about his economic growth plan in a speech scheduled for Thursday in Tokyo.
Exporters were broadly higher with electronics giant Kyocera jumping 3.36 percent to 5,220 yen and automaker Honda up 3.05 percent at 4,215 yen.
Canon rose 1.53 percent to 3,315 yen.
In forex trade, the dollar bought 102.95 yen, up from 102.63 yen in New York Tuesday but well off a five-year high of 103.93 yen on Friday. - Sapa-AFP