Tokyo stocks rally on brisk earnings

Tokyo stocks rallied on Wednesday with investors cheered by positive earnings from major firms as they digested the Bank of Japan’s tweaks to its ultra-loose monetary policy.

The benchmark Nikkei 225 index rose 0.86 percent or 192.98 points to close at 22,746.70. The broader Topix index gained 0.94 percent or 16.47 points to end at 1,769.76.

“Investors had been concerned about a possible increase in interest rates but they were relieved to confirm that it’s not the case this time,” said Toshikazu Horiuchi, a broker at IwaiCosmo Securities.

“The market is largely looking at the BoJ’s decision positively,” Horiuchi told AFP.

Japan’s central bank on Tuesday revised down inflation forecasts, making only small tweaks to a monetary policy that has so far fallen short of raising prices and boosting the world’s third-largest economy.

Tokyo shares advanced further in afternoon trade as the yen slid against the dollar.

“The yen’s weakness is a tailwind for Japanese exporters,” said Hikaru Sato, senior technical analyst at Daiwa Securities.

The dollar fetched 112.03 yen in Asian afternoon trade, compared with 111.81 yen in New York late Tuesday and 111.05 yen in Tokyo on Monday.

Several Japanese firms reported strong profits after Tuesday’s closing bell, attracting buyers on Wednesday.

“Investors are also buying shares of firms showing strong earnings,” Horiuchi said.

“Corporate results announced by Japanese firms so far are quite positive, on the whole.”

In Tokyo, Sony soared 4.75 percent to 6,105 yen after it raised its full-year profit and sales forecasts on Tuesday.

Nintendo surged 6.36 percent to 39,100 yen after the game giant said Tuesday its quarterly net profit jumped 43.9 percent, driven by the global popularity of its Switch console and game titles.

Honda jumped 2.95 percent to 3,454 yen after reporting a 17.8 percent gain in its quarterly net profit and revising upward its full-year forecast.

ANA fell 2.04 percent to 4,016 yen, with rival JAL down 1.23 percent at 4,072 yen, after both reported sluggish April-June profits.