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Tokyo shares up on bank rally, weak yen

Pedestrians walk past an electronics quotation board displaying the current exchange rate of the Japanese yen against the US dollar in Tokyo  / AFP PHOTO / KAZUHIRO NOGI

Pedestrians walk past an electronics quotation board displaying the current exchange rate of the Japanese yen against the US dollar in Tokyo / AFP PHOTO / KAZUHIRO NOGI

Tokyo shares rose Tuesday as banks rallied and a weaker yen lifted exporters, including auto giants Toyota and Honda.

The dollar rose against the yen as upbeat US manufacturing data boosted bets that the world’s largest economy was strong enough to absorb an interest rate hike.

In Asian afternoon trading, the greenback fetched 102.23 yen up from 101.63 yen in New York Monday.

A weaker yen boosts the profitability of Japan’s exporting firms by making their goods cheaper.

“Overall, the US economy appears to be on a growth track,” Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group, told Bloomberg News.

“As some had been expecting a deterioration in the manufacturing figures, alleviation of such worries will help Japanese shares rise.”

Tokyo’s benchmark Nikkei 225 index climbed 0.83 percent, or 136.98 points, to 16,735.65, while the Topix index of all first section shares was up 0.71 percent, or 9.49 points, at 1,340.21.

US factory activity expanded in September, the Institute for Supply Management said Monday, after showing contraction the month before.

The news comes days ahead of the release of a closely watched jobs report.

In Tokyo trading, Toyota shares jumped 1.86 percent to 5,899 yen with Honda gaining 1.91 percent to 2,986.5 yen.

Financial stocks also rose as fears over Deutsche Bank’s future continued to ease after a source said it was nearing a deal to slash a multi-billion-dollar US fine.

Mizuho Financial climbed 1.71 percent to 171.6 yen while Mitsubishi UFJ advanced 1.85 percent to 516.6 yen.

Hitachi Construction Machinery rose 0.84 percent to 2,028 yen after the world’s biggest maker of giant excavators said Monday it was offering Aus$689 million ($529 million) to buy Australia’s Bradken.

Takara Bio, which produces testing materials related to the research of Japanese biologist Yoshinori Ohsumi, who won the Nobel Prize in medicine on Monday, rallied 1.90 percent to 1,711 yen.


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