Tokyo stocks close nearly 2% higher after US gains

TOKYO (AFP): Tokyo stocks closed sharply higher on Wednesday following rallies on Wall Street, where assurances from officials eased investor concerns over financial instability.

The benchmark Nikkei 225 index gained 1.93 percent, or 520.94 points, to 27,466.61, while the broader Topix index ended up 1.74 percent, or 33.63 points, at 1,962.93. The dollar fetched 132.36 yen, against 132.54 yen in New York on Tuesday.

Authorities in leading economies have pledged support for depositors and troubled lenders in efforts to calm markets, aiming to assuage fears of a financial crisis.

The US banking sector is now “stabilising”, Treasury Secretary Janet Yellen told an American Bankers Association conference on Tuesday.

Further interventions may be justified “if smaller institutions suffer deposit runs that pose the risk of contagion”, Yellen said.

Her remarks “sparked today’s risk-on mood,” said Edward Moya, senior market analyst at OANDA.

Coupled with a similar assurance from Deputy Treasury Secretary Wally Adeyemo, this is a “clear message” that officials are “not taking this banking turmoil lightly and that they will probably be proactive when the next major risk arises,” Moya added.
In Japan, “a wait-and-see attitude” is growing ahead of a US Federal Reserve policy decision later in the day, Mizuho Securities said during afternoon trade.

SoftBank Group surged 2.80 percent to 4,987 yen, Sony Group firmed 1.47 percent to 11,730 yen and Toyota climbed 1.92 percent to 1,801 yen.

Uniqlo operator Fast Retailing closed up 1.73 percent to 27,870 yen.