Tokyo stocks rose sharply Thursday, with Japan's key Nikkei stock index climbing ore than 2 percent as the yen's retreat against the U.S. dollar spurred an injection of funds from overseas which boosted domestic financier issues.

A man walks past a stock board outside a brokerage in Tokyo November 18, 2010. Japan's Nikkei jumped more than 2 percent to close above 10,000 for the first time since late June on Thursday as a fall in the yen against the dollar attracted strong fund inflows from overseas to bolster financial shares. (Xinhua/Reuters)
Brokers said that corrective moves saw investors realigning their portfolios and Japanese shares, particularly financial issues which have performed solidly recently, yet still deemed undervalued by some due to concerns of potential capital raising, were were snapped up.

In addition, exporter shares got a boost as the euro rose against the yen and a robust performance on Chinese bourses reinstalled investor confidence, following a sell-off earlier.

"A rebound in Shanghai and Hong Kong shares after they were hurt by worries about rate hikes in China is lending help to the market," said on local strategist.

The 225-issue Nikkei Stock Average gained 201.97 points, or 2. 06 percent, from Wednesday to 10,013.63, the highest closing since June 22, when it finished at 10,112.89, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 18.51 points, or 2.18 percent, to close at 868.81.

"Funds are coming into Japanese stocks as the yen's appreciation has stopped," said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. "Japanese stocks have been "underweight" among global fund managers because of concerns about the strong yen."

The yen fell to as low as 83.40 yen against the U.S. dollar, near the weakest level since Oct. 4 and below the assumed rate of many Japanese exporters who cheer a weaker yen as the value of overseas income boosts profits when repatriated.

The euro rose to 113.24 yen from 112.66 logged at the close of trading in Tokyo, as concerns of Ireland's debt abated following the government's planned talks with the European Union, International Monetary Fund and the European Central Bank over a possible bailout plan.

Financial issues were particularly robust today brokers said and despite foreign inflows moving into a nubbier of sectors, Japanese megabucks were among notable gainers Thursday.

Top lender Mitsubishi UFJ Financial Group climbed 4.3 percent to 412 yen and Mizuho Financial Group jumped 3.9 percent to 134 yen. Sumitomo Mitsui Financial Group advanced 3.4 percent to 2,652 yen and Resona Holdings surged 9.2 percent to 500 yen.


VietNamNet/Xinhuanet