Tokyo stocks close 2.18% higher

TOKYO- Tokyo stocks rose 2.18 percent Tuesday on a weaker yen and bargain-hunting after tumbling a day earlier in response to data showing the Japanese economy had slumped into recession.

The Nikkei 225 index at the Tokyo Stock Exchange, which lost almost three percent on Monday, ended up 370.26 points at 17,344.06. The Topix index of all first-section shares gained 2.10 percent, or 28.75 points, to 1,394.88.

“Monday’s gross domestic product data offered investors the biggest event-driven trade since the Bank of Japan’s October 31 surprise monetary easing announcement,” said an equity trading director at a foreign brokerage.

“Today, overseas investors are covering short positions but little else; they are waiting to see what kind of stimulus package the government will offer since the economic data was so bad.”

Official data showed Monday that the world’s number three economy shrank 0.4 percent in the July-September quarter, or at an annualised rate of 1.6 percent.

That followed a revised 1.9 percent shrinkage in April-June — or 7.3 percent at an annualised rate — putting the economy into recession.

The news makes it almost inevitable that Prime Minister Shinzo Abe will delay a sales tax increase due next October and call a snap election to fend off ruling party rivals.

“Since economic policies to this point have clearly not worked, a viable strategy from the government that will work is awaited before more bets on stocks are made,” Shunichi Otsuka, general manager of research and strategy at Ichiyoshi Securities, told Dow Jones Newswires.

Toray shares jumped 4.50 percent to 880.0 yen, adding to a 4.14 percent rise Monday on news that it would supply carbon fibre materials for Boeing’s new 777X jet and the Dreamliner in a 10-year deal worth more than one trillion yen.

Sony soared 6.41 percent to 2,478.5 yen, as chief executive Kazuo Hirai told an investors’ conference that he would like to reinstate dividend payments as soon as possible.

Last month Sony said it would not pay dividends for the first time since its shares started trading in Tokyo in 1958 as it reported a $1.0 billion six-month loss.

Toyota rose 2.53 percent to 6,998.0 yen after unveiling its Mirai fuel-cell sedan in what company chief Akio Toyoda said was a milestone for the auto industry.

In forex trading the dollar fetched 116.61 yen, against 116.63 in New York and well up from the levels below 116 yen seen earlier Monday in Tokyo.