TOKYO, December 19 – Tokyo shares closed at a fresh six-year high Thursday after the US Federal Reserve said it would start scaling back its bond buying programme from next month, citing a pick up in the world’s number one economy.
The benchmark Nikkei was up 1.74 percent, or 271.42 points, at 15,859.22, its best finish since December 2007.
The Topix index of all first section shares added 1.01 percent, or 12.58 points, to 1,263.07.
“The taper decision is naturally a plus for Japanese stocks,” said Kenji Shiomura, market analyst at Daiwa Securities. “Interest rates continue to be stable while the yen is lower.
“Positive factors are lined up for Japanese stocks,” he added, noting the market was bullish enough to surge even after a two percent advance the previous day.
The gains mirrored a rally on Wall Street, where the Dow and S&P 500 posted new records after the Fed said it would cut its stimulus programme next month, giving a vote of confidence in the US economy and jobs market.
After a two day meeting policymakers said the bank will buy $75 billion of bonds each month from January down from the $85 billion it has spent monthly since unveiling the scheme in September last year citing a string of upbeat data indicating the world’s number one economy is strengthening.
It said it would likely take “further measured steps at future meetings” if the economy continues to improve while keeping interest rates a record lows “well past the time” the unemployment rate declines below 6.5 percent its previous cut off point before tightening monetary policy.
On currency markets the dollar rallied, hitting new five-year highs in New York after the Fed announcement, peaking at 104.36 yen at one point up from levels below 103 yen earlier in Tokyo before settling at 104.13 yen. In afternoon Asian trade Thursday it fetched 104.00 yen.
The weak yen boosted export focused Japanese firms, with Panasonic up 2.53 percent at 1,213 yen, Nikon gaining 1.18 percent to 1,967 yen and Mitsubishi UFJ, Japan’s biggest bank, 1.69 percent higher at 660 yen.
Shares in Ohsho Food Service bucked the trend, falling 3.53 percent to 3,000 yen on news that the well known dumpling restaurant chain’s charismatic boss was shot dead on Thursday.
Takayuki Ohigashi, 72, was found bleeding and unconscious in a parking lot in front of the company’s headquarters in Kyoto at about 7:00 am, the firm said.
He was later confirmed dead at hospital.