Tokyo shares up 0.85% on recovery hopes

TOKYO - Tokyo shares gained 0.85 per cent on Friday, boosted by optimism over the pace of recovery for Japanese companies following the March earthquake and tsunami.

The Nikkei-225 index rose 81.97 points to 9,678.71. The Topix index of all first-section issues firmed 0.93 per cent, or 7.69 points, to 833.20.

News that Greece had agreed with the International Monetary Fund and the European Union on a five-year austerity programme in a bid to ease the nation's debt crisis also encouraged investors, dealers said.

Solid gains in China and other Asian bourses also lifted Japanese shares, they added.

Dealers have grown optimistic about a faster-than-expected recovery in supply chains in Japan after the disaster, as underscored by relatively solid automaker earnings forecasts.

"The improvement in earnings outlooks has triggered a shift in buying in large-cap stocks from small and medium-sized shares," Okasan Securities strategist Hideyuki Ishiguro told Dow Jones Newswires.

"With conditions uncertain in Europe, China, India, and the US, Japan is really the only economy that is certain to see a recovery ahead," Kenichi Hirano, operating officer at Tachibana Securities, also told Dow Jones.

Nissan said Thursday it expected a 15 per cent fall in annual net profit for the year to March 2012 but saw global sales rising 9.9 per cent to a record 4.6 million units. It said full production would return in October following massive disruption to supplies caused by the March 11 earthquake and tsunami.

Toyota shares rose 1.07 per cent to 3,285 yen (S$50.41), Nissan bounced back from earlier losses and finished 0.59 per cent higher at 844.

Energy issues lost ground in early trade following a sharp drop in US crude futures contracts after the International Energy Agency's decision to release 60 million barrels of oil into world markets.

But oil and gas exploration company Inpex found positive territory by the close, adding 1.92 per cent to 581,000 yen.

Shipping firms also rose. Nippon Yusen was up 2.03 per cent at 301 and Mitsui OSK Lines gained 3.22 per cent to 417 yen.

Japan's Chubu Electric Power rose 1.86 per cent to 1,474 on news it will receive a 100 billion yen ($1.25 billion) government loan as it looks to fund alternative power sources after it had to suspend its Hamaoka nuclear plant following the crisis at Fukushima.

Utilities not directly affected by the earthquake and tsunami that battered the Fukushima Daiichi plant have not restarted reactors that were undergoing maintenance at the time, due to objections from local governments.