TOKYO Feb 6 Tokyo's Nikkei average surged 4
percent to its highest level in more than four years on
Wednesday, after the yen declined sharply on bets that a
decision by the head of the Bank of Japan to step down early
will bring forward aggressive monetary easing.
Hikes in profit forecasts from the likes of Toyota Motor
Corp and Mitsubishi Heavy Machinery Ltd due to
the weaker yen, which inflates the value of earnings garnered
overseas, helped sustain the bullish mood.
The Nikkei climbed 432.78 points to 11,479.70, its
highest level in 52 months and was on track for its biggest
one-day percentage rise since March 2011.
The yen slumped to 94 yen against the dollar, a low not seen
for 33 months.
Bank of Japan Governor Masaaki Shirakawa said on Tuesday he
would step down together with his two deputies, three weeks
before the end of his five-year term.
Prime Minister Shinzo Abe has put the central bank under
relentless pressure to do more to pull the economy out of the
doldrums and made it clear that he wants a governor who will be
bolder in loosening monetary policy.
"It was a very aggressive, solid weakening of the yen to
what seems like relatively trivial news, but nonetheless news
that signals the expectation and recognition that the momentum
is Japan is continuing to favour yen weakening and risk-on
mood," said Stefan Worrall, director of cash equity sales at
Credit Suisse in Tokyo.
Toyota jumped 6 percent and was the most-traded stock by
turnover on the main board, while Mitsubishi Heavy soared over
Shares of companies that will benefit from a return to
inflation, which Abe has made clear he wants the BOJ to achieve,
were also in the spotlight, with the real estate sector
advancing 4.7 percent.
The broader Topix jumped 3.4 percent to 971.94.