Tokyo stocks close 0.73% higher

Tokyo stocks on Wednesday enjoyed their highest close since August 2008, despite international tensions over North Korea's military threat.

The Nikkei 225 index at the Tokyo Stock Exchange was up 0.73 percent, or 95.78 points, at 13,288.13. The Topix index of all first-section issues finished up 1.72 percent, or 19.00 points, at 1,121.04.

"Tension over North Korea and its threatened missile launch is a distraction, but traders are looking at the situation coolly for the moment," said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Pyongyang is believed to have moved two Musudan mid-range missiles to its east coast and mounted them on mobile launchers ahead of an expected test launch.

Nishi said confidence was unshaken on the Tokyo stock market, which has soared since December when Prime Minister Shinzo Abe took office with his pledges of big public spending.

The Bank of Japan (BoJ), under new governor Haruhiko Kuroda picked by Abe, last week unveiled a set of bold monetary easing measures, accelerating the trend of higher stocks and a lower yen.

Credit Suisse said in a note that Tokyo may be in a fresh rally cycle.

"The 2013 rally has already seen a short-term correction, and we think the market is now poised to enter a second upward phase following the BoJ's unprecedented monetary easing," it said.

"While the market could see a very short-term value-reversal phase, we see little possibility of investors favouring such risk factors long term as long as the rally continues."

The Nikkei business daily reported Tuesday nearly 70 percent of company managers polled expect earnings to pick up following the monetary easing.

The survey, taken on Tuesday with valid answers from presidents or other top executives of 104 leading firms, showed more than 90 percent of them appreciate the measures, the daily said.

In Wednesday's trade, bank shares rose, with Sumitomo Mitsui Financial jumping 6.69 percent to 4,620 yen and Mitsubishi UFJ Financial climbing 4.96 percent to 655 yen.

In New York the Dow rose 0.41 percent to another record high of 14,673.46 on Tuesday, led by strong gains in tech giants Microsoft and Intel.

On forex markets the dollar eased slightly to 99.12 yen and the euro sat at 129.67 yen, compared with 99.18 yen and 129.73 yen in New York on Tuesday.

-- Dow Jones Newswires contributed to this article --