Tokyo stocks open higher as yen slips

Tokyo stocks opened higher Tuesday as a weaker yen lifted exporters following reported remarks by the US treasury secretary that a strong dollar is “a good thing” over the long term.

Investors also got relief from solid gains on Wall Street in post-holiday trading on Monday, though kept watch over North Korean and Syrian geopolitical risks.

“Japanese stocks will likely rebound (from the recent drops) today with investors heartened by higher US stock prices and the breather in the yen’s appreciation,” Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.

The dollar rose after the Financial Times reported US Treasury Secretary Steven Mnuchin’s comments supporting a strong dollar.

“As the world’s currency, the primary reserve currency, I think that over long periods of time the strength of the dollar is a good thing,” he told the newspaper in an interview.

His comments came just days after President Donald Trump told the Wall Street Journal that the greenback was “getting too strong”.

But Mnuchin said that the president was making “a factual comment about the strength of the dollar in the short term” and that Washington does not intervene in currency markets.

The dollar rose to 109.20 yen early Tuesday from rates in the mid-108 yen range seen before news on Mnuchin’s remarks came out.

A weak yen is positive for Japanese exporters as it inflates their repatriated profits.

Tokyo’s benchmark Nikkei 225 index, which snapped a four-day losing streak on Monday, added 0.86 percent, or 157.29 points, to 18,512.55 in early trading, while the Topix index of all first-section issues rose 0.85 percent, or 12.52 points, to 1,478.21.

Carmakers were broadly higher with Nissan rising 1.78 percent to 1,028.5 yen and Honda up 1.58 percent at 3,148 yen.

Panasonic rose 1.71 percent to 1,242.5 yen while IT investor SoftBank climbed 1.86 percent to 7,738 yen.

Investors were also watching economic talks later Tuesday between Japan and the United States as Vice President Mike Pence arrives in Tokyo on the second leg of his Asian tour.