Tokyo Stocks Higher After OPEC Deal, Yen Falls

TOKYO, Dec 1, (UrduPoint / Pakistan Point News - 01st Dec, 2016 ) - Tokyo stocks opened sharply higher on Thursday with investor sentiment boosted by the yen's sharp drop and an OPEC deal to cut oil production.

The yen's fall to its weakest level in more than nine months lifted exporters, while the OPEC deal sparked massive buying of energy issues. "What's key is the rise in expected (US) inflation," said Norihiro Fujito, a Tokyo-based senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"With higher expectations for inflation, long-term yields (on Treasury bonds) have risen in the US, which in turn has weakened the yen, boosting Japanese stocks," he told Bloomberg news. Tokyo's benchmark Nikkei 225 index rose 1.54 percent, or 281.31 points, to 18,589.79 in the first few minutes of trading, while the Topix index of all first-section issues was up 1.24 percent, or 18.27 points, to 1,487.70.

The Dollar, meanwhile, rose to 114.

82 Yen early Friday, a level unseen since mid-February, before coming off slightly to 114.47 yen. Members of the Organization of the Petroleum Exporting Countries on Wednesday reached a deal to cut output for the first time since 2008, putting an end to months of suspense.

Oil explorer Inpex shot up 10.00 percent to 1,193.5 yen on hopes for higher prices, and Japan Petroleum jumped 9.71 percent to 2,553 yen. The greenback also got support from further optimism on the US economy.

The Federal Reserve's Beige Book survey said Wednesday that the world's largest economy continues to expand nationwide, while the ADP payroll firm said private-sector companies hired at a much faster pace in November than October.

Investors cheered the weaker yen, scooping up shares in exporters which often get a boost on a rosier profit outlook when the Currency falls. Toyota climbed 2.19 percent to 6,795 yen and Canon rose 1.77 percent to 3,319 yen.