The stock market in Tokyo ended higher on Tuesday, buoyed by the positive cues from Wall Street, which witnessed the biggest one-day rally since October 2008 on the Obama Administration's plans to help banks sell toxic assets through the Public-Private Investment Program and pave way for a revival in credit flow, which is critical for reviving the economy.
On Monday, the Dow closed up 497 points or 6.84% at 7,776, the Nasdaq gained 99 points or 6.76% to 1,556, and the S&P 500 advanced 54 points or 7.08% to finish at 823.
Crude oil was modestly down $0.26 at $53.54 a barrel in Asian trading having ended Monday's session higher by $1.73 at $53.80 a barrel on New York Mercantile Exchange after hitting an intra-day low of $51.62 and a high of $54.05.
The benchmark Nikkei 225 Index ended 273 points or 3.32% higher at 8,488. The market, having opened stronger on Wall street cues, traded sidewards for the bulk of the session before surging up further in the final hour of trading on renewed optimism that the U.S. initiatives will ultimately revive the global banking sector. The index, having declined to a 26-year low of 7,021 on March 10, has gained more than 20% since then, primarily led by financials and commodities on optimism stimulus initiatives from the Bank of Japan and the government will help revive the economy. The broader Topix Index of all First Section issues gained 2.7% or 21.16 points to 813. Financial stocks and exporters were the major gainers in the market.
On the economic front on Tuesday, minutes from the Bank of Japan's monetary policy meeting held on February 18 and 19 revealed that board members suggested that the Japanese economy may begin to recover from the current recession in the second half of this year at the earliest. At the meeting, the board voted unanimously to keep the overnight call rate unchanged at 0.10%. The board also decided to expand special funds-supplying operations in order to facilitate a fall in longer-term interest rates that are actually applicable to fund-raising by firms and relieve them from funding concerns.
Among banking stocks, Mitsubishi UFJ, Japan's biggest bank, gained 4.49%, Sumitomo Mitsui rose 3.16% and Mizuho Financial advanced 5.00%. Exporters also gained on the back of a weaker yen. Canon advanced 4.35%, Sharp gained 3.08% and Sony rose 5.72%. Automaker Toyota added 3.61% and Honda moved up 2.42%.
Oil-related stocks also advanced. Inpex edged up 0.14%, Nippon Oil gained 3.35% and Showa Shell added 1.10%. Among trading houses, Mitsubishi Corp. gained 4.23%, Itochu moved up 3.99% and Sumitomo Corp. rose 1.89%.
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