Tokyo - Tokyo stocks rose 0.67 percent on Thursday after the dollar hit a three-week high against the yen in response to the US Federal Reserve's decision to bring an end to its stimulus programme.
The Nikkei 225 index at the Tokyo Stock Exchange climbed 104.29 points to 15,658.20, while the Topix index of all first-section issues was up 0.65 percent, or 8.26 points, at 1,278.90.
After a two-day meeting the US central bank's policy committee said it would bring an end to six years of monetary easing as the economy gets back on track.
It also said it would keep interest rates at record lows for “a considerable time” after the end of the bond-buying programme.
But a shift to a more optimistic assessment of the labour market, after having shown doubts about gains all year, showed a “hawkish” turn by policymakers, analysts said, bolstering the dollar.
The greenback was up at 109.13 yen in Tokyo Thursday, up from 108.90 yen in New York, and sharply higher than the 108.12 yen in Tokyo earlier Wednesday.
A weaker yen is a plus for shares of Japanese exporters as it makes them more competitive overseas and inflates repatriated income.
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said the Fed's move was a factor in Tokyo, but he added that the Japanese government's decision on whether to raise sales taxes again next year was a bigger factor for the market.
An April sales tax rise - Japan's first in 17 years - has hit the country's economy, which sharply contracted in the second quarter, throwing into question whether Tokyo would press on with another levy hike.
“The overall picture remains quite complicated with Europe and China slowdowns also in the mix. Vis-a-vis Japanese stocks, the government's looming tax hike decision will have much to do with how much more the Nikkei can rise,” Fujito said.
Nintendo shares rose 1.03 percent to 11,235.0 yen - after surging more than seven percent in earlier trade - after the videogame giant said first-half net profit jumped as a sharply weaker yen offset slowing sales.
Nintendo gave up most of its early gains following the company's mid-morning announcement that it will develop a device to measure human sleep quality.
“This smacks a bit of desperation,” an equity trading director at a European brokerage told Dow Jones Newswires.
“Analysts should be alarmed when companies stray this far away from their main line of business.”
Skymark Airlines dropped 6.39 percent to 205.0 yen after a report in the leading Nikkei business daily that said the struggling carrier was likely to post a net loss of more than 10 billion yen in its fiscal year to March.
On Wall Street, the Dow eased 0.18 percent, the S&P 500 dipped 0.14 percent and the Nasdaq fell 0.33 percent. - Sapa-AFP