Tokyo stocks open higher after Wall St gains

Tokyo stocks opened higher on Monday, supported by big gains on Wall Street last week as fears of accelerated US interest rate increases abated.

The benchmark Nikkei 225 index rose 0.98 percent or 213.54 points to 22,106.32 in early trade while the broader Topix index was up 0.71 percent or 12.56 points at 1,773.09.

“Japanese stocks are likely to test a rebound on the back of sharp rises in US stocks and a breather in the yen’s appreciation,” Okasan Online Securities chief strategist Yoshihiro Ito said in a commentary.

All three main indexes on Wall Street finished sharply higher on Friday, as the Federal Reserve in a semi-annual report to Congress appeared to tamp down concerns that higher wages would boost inflation.

Stock markets globally plunged earlier in February on selling triggered by worries that the Federal Reserve could accelerate its pace of rate increases.

“Selling may hit the Nikkei average again this week after the rebound in the New York Dow runs its course,” Masayuki Kubota, chief strategist at Rakuten Securities, said in a commentary.

The key is congressional testimony by new Federal Reserve chief Jerome Powell this week, he said.

“He will probably give no strong remarks, steering clear of a hawkish or dovish tone, but sometimes we see a real intention through innocuous remarks,” he said.

The dollar firmed to 107.02 yen from 106.83 yen in New York on Friday.

Sharp climbed 3.06 percent to 3,695 yen after a weekend report by the Nikkei business daily that it would set up a joint venture with its parent group Taiwan’s Hon Hai, better known as Foxconn, to produce cameras to be installed in cars.

Sony was up 0.84 percent at 5,399 yen and SoftBank Group gained 1.50 percent to 9,030 yen.