Tokyo stocks close higher after US gains

Tokyo shares closed higher Monday, with risk appetite growing among investors on expectations that the Federal Reserve’s monetary tightening may slow down.

The benchmark Nikkei 225 index gained 1.14 per cent, or 324.80 points, to end at 28,871.78, while the broader Topix index rose 0.60 per cent, or 11.78 points, to 1,984.96.

The dollar fetched 133.15 yen, against 133.50 yen on Friday in New York.

Japanese markets tracked gains on Wall Street, with recent US inflation data taken by some as a sign that the pace of rate hikes by the Fed will decelerate.

A “risk-taking sentiment prevailed” in Tokyo on Monday, Okasan Online Securities said.

Investors took cues from US stocks, which were “driven up by speculation the Federal Reserve’s monetary tightening will slow” as well as “easing concerns over inflation”, the brokerage added.

Monday’s session followed a government announcement that the world’s third-largest economy grew 0.5 per cent in the April-June quarter, marking three quarters of low or near-flat expansion.