Tokyo stocks open higher on cheaper yen

A pedestrian walks past an electronics stock indicator showing share prices on the Tokyo Stock Exchange. (AFP pic)

TOKYO: Tokyo stocks opened higher on Friday, supported by a cheaper yen as the dollar strengthened on stronger-than-expected US GDP growth data.

The benchmark Nikkei 225 index added 0.53%, or 113.90 points, to 21,499.06 in early trade, while the broader Topix index was up 0.38%, or 6.18 points, at 1,613.84.

“The Japanese market is seen starting on a positive note thanks to a cheaper yen against the dollar,” Toshiyuki Kanayama, senior market analyst at Monex, said in a note.

The dollar fetched 111.43 yen in early Asian trade, against 111.39 yen in New York and 110.91 yen in Tokyo on Thursday.

The “better-than-expected fourth quarter US GDP outcome… is almost wholly responsible for the re-strengthening in the US dollar after an earlier fall,” Ray Attrill, currency strategist at National Australia Bank, said in a commentary.

Re-emerging optimism over US-China trade talks also helped boost the market, analysts said.

Washington and Beijing are on the verge of a “historic” trade agreement, which will address key structural issues like China’s subsidies to major industries, Larry Kudlow, head of the US National Economic Council, said Thursday.

The coming trade agreement would include “a significant reduction of Chinese subsidies to those target industries”, Kudlow said on CNBC.

“I think we’re heading toward a remarkable historic deal.”

He added that the final details remained to be agreed but were expected to be finalised at “a meeting in late March down at Mar-a-Lago” between US President Donald Trump and Chinese leader Xi Jinping.

Elsewhere, Japan’s unemployment rate remained at low levels in January, standing at 2.5 %, but edging up a 0.1-percentage point drop from the previous month, according to data from the internal affairs ministry released before the opening bell.

In Tokyo, some blue-chip exporters were higher, with Olympus gaining 1.42% to 4,995 yen, Sharp trading up 1.76% at 1,325 yen and Canon up 0.53% at 3,183 yen.

Market heavyweight and Uniqlo casual wear operator Fast Retailing was up 1.61% at 53,000 yen.

On Wall Street, the Dow ended down 0.3% at 25,916.00.