This file photo shows the Tokyo Stock Exchange. (Mainichi)
TOKYO (Kyodo) -- Tokyo stocks ended sharply higher Monday as the weaker yen against the U.S. dollar aided exporters, while sentiment was heartened after Prime Minister Fumio Kishida said he will not immediately increase the capital gains tax rate.
The 225-issue Nikkei Stock Average ended up 449.26 points, or 1.60 percent, from Friday at 28,498.20. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 34.73 points, or 1.77 percent, higher at 1,996.58.
Gainers were led by marine transportation, air transportation and mining issues.
The U.S. dollar strengthened to the upper 112 yen range, its highest level since December 2018, after a rise in U.S. Treasury yields late last week fueled expectations of a wider interest rate gap between the United States and Japan, dealers said.
The sharp advances in the Japanese stock market also prompted investors to unload the yen, perceived as a safe-haven asset, they said.
Shares were mixed at the outset, but buying soon took the upper hand on the weaker yen lifting export-related issues and Kishida's remark Sunday on a TV program that he will not change the capital gains tax rate for the time being, brokers said.
The prime minister reaffirmed Monday in a lower house plenary session that the government needs to do many things, such as focus on pay raises, before reviewing the tax on capital gains and dividends.
Kishida's plan to increase the capital gains tax from the current flat 20 percent to implement his wealth redistribution policy was among market concerns that had triggered the Nikkei's recent downtrend, the brokers said.
"The advances were attributed to a set of positive factors including Mr. Kishida's remarks, a weaker yen boosting exporters and sharp gains in the Hang Seng stock index in Hong Kong," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Miura said rises in the Hong Kong market came after news reports that the Chinese government ordered miners to significantly increase coal output capacity in Inner Mongolia, a major production site.
The reports raised hopes that recent electric shortages in the world's second largest economy will be resolved and help Japanese companies operating in the country or doing business with Chinese firms, he said.
At the Tokyo Commodity Exchange, Middle East crude oil futures briefly eclipsed 54,500 yen per liter, hitting the highest level since October 2018, following advances in the benchmark West Texas Intermediate crude futures. The price has been climbing recently on expectations of a global supply crunch.
On the First Section, advancing issues outnumbered decliners 1,834 to 295, while 54 ended unchanged.
Major exporters gained, with Mitsubishi Motors jumping 18 yen, or 5.9 percent, to 322 yen, Nintendo adding 510 yen, or 1.0 percent, to finish at 51,150 yen and construction machinery maker Komatsu rising 33.50 yen, or 1.3 percent, to 2,677.50 yen.
Sony Group advanced 525 yen, or 4.4 percent, to 12,385 yen.
The Japanese electronics conglomerate was reported late last week to be a potential partner for Taiwan Semiconductor Manufacturing Co. to build a chip-making factory in Japan, a project for which the Japanese government is considering providing financial support.
Bucking the upward trend, industrial machinery maker Yaskawa Electric declined 100 yen, or 1.9 percent, to 5,070 yen after its earnings forecast for the year through February 2022 released late last week was slightly below market expectations.
Its announcement comes out earlier than other major corporates that close their books in March, and is widely seen as a bellwether for the performance of Japanese manufacturers.
Trading volume on the main section dropped to 1,194.17 million shares from Friday's 1,356.77 million shares.
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