Tokyo stocks open higher as yen plunges

Tokyo stocks open higher as yen plunges
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Tokyo: Tokyo stocks opened higher Thursday as exporters rose following the yen’s plunge on receding worries over the North Korean nuclear crisis.

The benchmark Nikkei 225 index gained 0.91 percent, or 190.69 points, to 21,222.00 in early trade while the broader Topix index was down 0.65 percent, or 11.08 points, at 1,710.64.

“Buying will likely prevail on the back of the yen’s drop,” Okasan Online Securities said in a commentary.

A weaker yen is positive for Japanese exporters as it makes their products more competitive abroad and inflates profits when repatriated.

The dollar was trading at 106.87 yen early Thursday, hardly changed from New York on Wednesday but well above the mid-105 yen range seen when the Tokyo market closed for Wednesday.

“The (yen’s) safe haven status… has for now been usurped by two things,” Ray Attrill, head of currency strategy at National Australia Bank, said in a commentary.

One is “more encouraging sound bites related to North Korea, where Kim Jong Un has reportedly offered talks with Japan,” he said, also citing this week’s unannounced talks between Kim and China’s leader Xi Jinping.

The other factor behind the yen’s drop, Atrill said, was a giant overseas acquisition being eyed by Japan’s top drugmaker Takeda Pharmaceutical Co.

Takeda Pharmaceutical shares fell 6.00 percent to 5,200 yen after it said it was considering buying Ireland-based drugmaker Shire as part of its attempts to boost overseas acquisitions.

The news of a possible takeover boosted Shire shares in London by more than 14 percent, putting its market value at 32 billion pounds ($45 billion).

Exporters were broadly higher, with Toyota climbing 0.99 percent to 6,930 yen and Canon up 0.10 percent at 3,889 yen.

AFP