Nikkei 225 Watch: Hitting Three-Week High

The Nikkei 225 today surged to a three-week high, lifted by a weakened yen and positive manufacturing figures from Europe. The Japanese blue-chip index ended the day 405.52 points or 2.99 percent higher at 13,978.44.

The Topix index, which includes all companies listed on the Tokyo Exchange’s First Section, rose 31.40 points or 2.81 percent to 1,149.18.

A fall in the yen sparked a rally in exporters with Nintendo rising 4.96 percent to ¥11,860.00 and automaker Nissan and Toyota Motor gaining 3.16 percent and 3.33 percent to ¥1,012.00 and ¥6,200.00, respectively.

A weaker yen makes Japanese products more competitive overseas and benefits exporters when their dollar earnings are repatriated.

The Japanese currency is down by 15 percent against the greenback this year, weighed down by the Bank of Japan’s monetary stimulus programme launched in April and meant to end years of deflation and boost growth.

Tokyo Electric Power continued to reverse last week’s losses, closing 3.35 percent higher at ¥525.00 after the Japanese government pledged $500 million (₤322 million) to clean up the contaminated water at the Fukushima nuclear plant.

Upbeat factory data from Europe convinced investors on the Asian markets to move away from safe-haven assets such as gold and the yen and towards riskier assets.

MSCI’s broadest index of Asia-Pacific shares excluding Japan climbed 0.3 percent, adding to yesterday’s 1.2 percent increase and on track for a fourth consecutive trading session of gains.