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Tokyo stocks erase early losses to end 0.31% higher

TOKYO: Tokyo stocks cast off early losses to close 0.31 percent higher on Wednesday, as a weaker yen overshadowed a sharp fall on Wall Street.

The Nikkei 225 index at the Tokyo Stock Exchange added 58.41 points to end at 18,723.52, while the Topix index of all first-section shares was flat, edging up 0.92 points to 1,525.67.

Tokyo opened in negative territory after US shares slumped on renewed worries about higher interest rates and the soaring dollar.

The Dow fell 1.85 percent, the S&P 500 lost 1.70 percent and the Nasdaq sank 1.67 percent.

The dollar has pushed to multi-year highs on rising speculation that the Federal Reserve will raise near-zero rates more quickly than previously anticipated after Friday’s strong US jobs report.

It rose to 121.49 yen Wednesday from 121.07 yen in US trade after hitting a near eight-year high above 122 yen earlier Tuesday in Asia.

The greenback’s ascent against the yen is generally positive for Japanese exporters as it makes them more competitive overseas and inflates the value of their repatriated profits.

The Japanese market has also been winning support from an inflow of cash from the country’s public pension fund — the world’s biggest — as it shifts more of its bond-heavy portfolio into stocks.

“Japanese company earnings are good, the weaker yen is a boon, and there’s stable demand from public institutions,” Yusuke Kuwayama, a portfolio manager at Tokio Marine & Nichido Fire Insurance, told Bloomberg News.

“Given the stability of Japanese stocks, we see very strong demand from both domestic and overseas players, so when it falls we should see this kind of supporting flow come in.”

Investors largely shrugged off a 1.7 percent fall in Japanese machinery orders in January, after an 8.3 percent jump the month before.

Machinery orders are a key leading indicator of capital spending.

Sony shares rose 0.35 percent to 3,256.5 yen, Uniqlo clothing chain operator Fast Retailing jumped 1.13 percent to 44,920.0 yen, while Japan’s biggest bank Mitsubishi UFJ turned down 0.90 percent to 749.1 yen.

Energy explorer Inpex fell 2.32 percent to 1,371.0 yen on weak oil prices. -AFP

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