Tokyo stocks close higher after US rallies

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Japan's household spending dipped 10.2 percent in September on-year, according to the internal affairs ministry data released before the opening bell.
Japan's household spending dipped 10.2 percent in September on-year, according to the internal affairs ministry data released before the opening bell.
Photography by ZhangXun

Tokyo stocks closed higher on Wednesday as investors took heart from Wall Street records fuelled by progress in the race to produce coronavirus vaccines.

The benchmark Nikkei 225 index gained 1.33% or 350.86 points, snapping a three-day losing streak, to end at 26 817.94, while the broader Topix index rose 1.17%, or 20.61 points, to 1 779.42.

"Tokyo stocks rose following gains by the three major US indexes, and positive figures for domestic machinery orders," Okasan Online Securities said.

"They continued to climb on hopes that the economy will return to normal thanks to coronavirus vaccines."

In US trading, both the S&P 500 and Nasdaq finished at all-time highs, with the S&P 500 up 0.3% and the Nasdaq Composite Index up 0.5%. The Dow advanced 0.4% to close at 30 173.88.

Sentiment has been boosted by major vaccine announcements that have lifted confidence about the potential for a strong economic recovery next year.

The US Food and Drug Administration on Tuesday said the Pfizer-BioNTech Covid-19 vaccine was safe and effective, raising expectations it is poised to grant emergency approval.

Also Tuesday, AstraZeneca became the first Covid-19 vaccine-maker to publish final-stage clinical trial data in a scientific journal, confirming that its vaccine works in 70% of cases.

And Britain became the first Western country to start a mass coronavirus vaccination campaign, with a 90-year-old woman receiving the initial jab.

A higher-than-expected figure in Japan's machinery orders in October - a 17.1% rise from the previous month - is also supporting the market, analysts said.

In Tokyo trading, SoftBank Group jumped 5.56% to 7 489 yen after Bloomberg reported the firm was considering going private by gradually buying back outstanding shares.

Toyota climbed 2.08% to 7 349 yen following a report the automaker plans to invest $2 billion in electric cars in Indonesia over five years.

Its rivals Nissan soared 6.76% to 574.1 yen and Honda advanced 1.45% to 3,128 yen.

Airlines were also higher with Japan Airlines growing 2.64% to 1,982 yen and ANA Holdings jumping 3.05% to 2,381 yen.

The dollar fetched 104.15 yen in Asian trade against 104.16 yen in New York late Tuesday.

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