TOKYO: Tokyo's benchmark Nikkei 225 index soared more than 3.0 per cent by the break on Wednesday as the yen plunged on news that the head of the Bank of Japan had said he would quit early.
The Nikkei was up 3.11 per cent, or 343.91 points, at 11,390.83, while the broader Topix index of all first-section shares jumped 2.87 per cent, or 26.93 points, to 966.63.
Bank of Japan (BoJ) Governor Masaaki Shirakawa on Tuesday said he would step down about three weeks before his five-year term is due to end on April 8, after the central bank and Japan's new government butted heads on policy matters.
The country's new Prime Minister Shinzo Abe has openly said he wants a more like-minded candidate, fuelling expectations a new governor will take over who has similar views on following more aggressive monetary easing.
The BoJ head said he had told the prime minister he will resign on March 19, when the terms for two deputy governors expire, so that his successor and the rest of the bank's new leadership could be sworn in at the same time.
He rejected speculation that government pressure forced his early resignation.
"(His) explanation is entirely plausible, although Shirakawa could perhaps be forgiven for wanting to leave as soon as possible given the criticism he has received for 'not doing enough' to end deflation," London-based Capital Economics said in a note.
In Tokyo forex trading, the dollar bought 93.87 yen from 93.61 yen in New York on Tuesday, while the euro fetched 127.57 yen against 127.13 yen.
Yen "weakness has resumed with a vengeance", National Australia Bank said in a note.
Apart from the weakening yen, risk appetite has risen, said SMBC Nikko Securities general manager of equities Hiroichi Nishi, just a day after global markets slumped on concerns over political uncertainty in Spain and Italy.
"Global markets continue to normalise, allowing risk-on trading to resume," he told Dow Jones Newswires.
"This is partially reflected in the fall of the yen."
Wall Street also provided a strong lead, recovering many of Monday's losses and picking up momentum from solid economic indicators. The Dow Jones Industrial Average finished 0.71 per cent higher at 13,979.30, near its record high.
- AFP/ck
Tokyo's Nikkei up more than 3.0% as yen plunges
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Tokyo's Nikkei up more than 3.0% as yen plunges
