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Tokyo stocks end 0.68% higher

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(Globalpost/GlobalPost)

Tokyo stocks ended 0.68 percent higher Friday, reversing earlier losses despite a lack of fresh trading cues and following a tumble in US and European markets.

The benchmark Nikkei 225 index ended 76.81 points higher at 11,385.94 while the Topix index of all first-section issues edged up 0.06 percent, or 0.62 points, to 963.48.

The headline index reversed a morning dip into negative territory after losses in US and European shares with investors nervous over the looming threat of compulsory US government spending cuts, and likely fallout on global markets.

The US Federal Reserve's latest policy meeting has stoked fears it could end its huge monetary easing sooner than expected.

But options trading and short covering in the afternoon helped boost the Tokyo market as the yen weakened against the dollar, traders said.

"Some resilience in Shanghai shares, as well as renewed weakening in the yen has forced players to be very cautious in going too far in betting against Japanese stocks," said Investrust CEO Hiroyuki Fukunaga.

US lawmakers failed to reach agreement on a comprehensive package to avert the so-called "fiscal cliff" of spending cuts and tax hikes by December 31 last year.

They opted instead for tax hikes on annual income above $400,000 and a two-month delay on the sharp cuts, which means they now face a March 1 deadline to avert billions of dollars in automatic budget cuts.

In stock trading, automakers were down with Toyota shares slipping 0.73 percent to 4,730 yen and Honda off 0.14 percent at 3,470 yen.

Nissan slipped 0.10 percent at 939 yen, as a report said it plans to build a new plant in India together with French partner Renault.

Sony, which lost 1.77 percent Thursday following its announcement of a new generation PlayStation 4 system, dropped 2.63 percent to 1,296 yen.

In currency markets, the dollar fetched 93.27 yen, turning up from 93.11 yen in New York Thursday.

The euro rebounded slightly, as investors keep a close eye on a general election in Italy at the weekend.

The European single currency bought $1.3212 against $1.3188 in US trade while fetching 123.22 yen against 122.81 yen.

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