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Tokyo stocks soar 3% in opening trade

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(Globalpost/GlobalPost)

Tokyo stocks soared three percent in opening trade on Monday as the yen plunged further following the Bank of Japan's sweeping monetary easing last week.

The Nikkei 225 index at the Tokyo Stock Exchange, which gained 3.51 percent during the previous week, added 3.05 percent, or 391.58 points, to 13,225.22 in the first five minutes of trade.

The benchmark index then came back slightly to stand at 13,195.93, up 2.82 percent or 362.29 points.

Investors are cheering the weakening yen and its obvious impact on future corporate earnings, market players said.

The yen kept tumbling in early Asian trade Monday, changing hands at 98.54 to the dollar and 128.04 to the euro against 97.54 yen and 126.70 yen in new York Friday afternoon. The euro bought $1.2992 against $1.2990 in US trade.

"The yen should trump all concerns about the market being overheated and allow the Nikkei to trade comfortable above the 13,000 mark," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

The scope of the Band of Japan action Thursday took some analysts and investors by surprise, despite expectations of major moves by the central bank in its first meeting under new governor Haruhiko Kuroda.

The yen's continued drop is likely to offset a slack performance of US equities Friday in the wake of poor jobs data.

US stocks pared back sharp losses Friday as traders digested a surprisingly weak March labour report and watched rising global tensions with North Korea.

The Dow Jones Industrial Average closed down 40.86 points (0.28 percent) to 14,565.25 while the broad-based S&P 500 slid 6.70 (0.43 percent) to 1,553.28.

-- Dow Jones Newswires contributed to this article --

bur-mis/mtp

http://www.globalpost.com/dispatch/news/afp/130407/tokyo-stocks-soar-3-opening-trade-1