Tokyo stocks jump on weaker yen after solid US jobs report

Tokyo stocks jumped Monday morning, with exporters getting a boost from a weaker yen after another strong US jobs report made a Federal Reserve interest rate hike this month virtually certain.

The gain of more than 200,000 new posts in November reinforced the view that the world’s number two economy is well on the recovery track, lifting Wall Street’s three main indexes more than two percent.

“The majority of market participants should be expecting a December rate hike now that we’ve seen that the jobs data is good,” Shoji Hirakawa, chief equity strategist at Okasan Securities, told Bloomberg News.

“The focus now is on the pace of the rate hikes.”

At the lunch break, the benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 1.50 percent, or 292.17 points, to 19,796.65, while the Topix index of all first-section shares was up 1.27 percent, or 19.94 points, to 1,593.96.

Tokyo investors are now awaiting a revision of Japanese third-quarter gross domestic product growth on Tuesday morning.

The initial estimate last month showed Japan slipped into recession during the six months to September but the new figures are widely expected to instead show flat or modest growth in the world’s number-three economy.

“A jump in capital spending suggests that output may have been flat last quarter instead of the initially reported 0.2 percent quarter-on-quarter decline,” research house Capital Economics said in a commentary.

In currency trade, the dollar rose to 123.31 yen from 123.11 yen Friday in New York, a plus for exporters’ profitability and competitiveness overseas.

Toyota shares rose 0.52 percent to 7,732 yen, Sony added 1.49 percent to 3,137 yen and Uniqlo-operator Fast Retailing, a market heavyweight, jumped 2.14 percent to 47,720 yen.

But energy-linked shares fell as the OPEC cartel decided against slashing high output levels, keeping prices under pressure.

Inpex fell 1.57 percent to 1,225.5 yen while Japan Petroleum Exploration dropped 1.59 percent to 3,395 yen.

The euro weakened to 133.90 yen from 133.93 yen in US trade after European Central Bank head Mario Draghi said it still had more ammunition to boost the eurozone economy. His comments came after the euro surged Friday with markets disappointed with an ECB revision of its stimulus that fell short of expectations.

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