TOKYO: Japanese stocks strengthened, snapping a two-day drop, after more than US$430 billion capital was pledged for the International Monetary Fund to protect the global economy from Europe’s sovereign debt crisis.
The Japan’s Nikkei 225 Stock Average rose 0.7% to 9,627.98 as of 9:20 a.m. in Tokyo after declining 0.8% last week. Meanwhile, the broader Topix Index gained 0.7% to 817.45, with about four shares rising for each that fell.
The strengthening index was also contributed by positive performance of several stocks, namely Nintendo Co., a gaming consoles maker that generates 41% of its sales in Europe, climbing up by 2.1%, while Hitachi Construction Machinery Co. also strengthened by 0.8%.
However, Mitsui Chemicals Inc. dropped 5.4% after an explosion at its industrial glue factory killed an employee and injured 22 others yesterday.
Responding on the additional capital, Prasad Patkar, who helps manage about US$1 billion at Platypus Asset Management Ltd. in Sydney, viewed, “The additional money for the IMF just adds another layer of protection for investors against the existing crisis.”
“Asia is more likely to trade out of the Chinese news flow in the short term than anything else,” he added. (Bloomberg/t01/aph)