Tokyo shares rise 1.94% by break

TOKYO - Tokyo shares rose 1.94 per cent Monday morning with the yen weakening further after G20 finance leaders gave cautious approval to Japan's huge monetary easing moves.

The benchmark Nikkei 225 index gained 258.23 points to 13,574.71 by the break, while the Topix index of all first-section shares was also up 1.94 per cent, or 21.85 points, to 1,148.52.

Exporters got a boost as the dollar firmed to 99.85 yen (S$1.24), up from 99.52 in New York late Friday and approaching the 100 yen mark it has not touched since April 2009.

The euro rose also rose at 130.46 yen from 129.94 yen.

"The dollar is now set for a re-test of the 100 yen mark," said Kenichi Hirano, market analyst at Tachibana Securities.

"There is fresh investor capital that had been waiting on the G20 conclusion to jump into the market," he told Dow Jones Newswires.

The finance chiefs of the G20, after a meeting in Washington, gave a cautious endorsement of Japan's huge monetary stimulus, agreeing it was necessary to boost the country's stagnant economy.

Japan's latest policy actions "are intended to stop deflation and support domestic demand", they said in a statement, referring to falling prices that have stunted growth for years.

A senior US Treasury official, speaking on condition of anonymity, said Japanese officials had stressed how the policy moves would lift demand in the world's third-largest economy, which has been struggling for two decades.

"The latest decision on quantitative easing remedies the situation that was building up for years," said Russian Finance Minister Anton Siluanov, chair of the G20 meeting, at a news conference.

Exporters and telecoms led the market's rise, with mobile operator SoftBank up 1.94 per cent at 4,450 yen and automaker Honda climbing 2.33 per cent at 3,940 yen.

Mitsui Engineering & Shipbuilding surged 13.60 per cent to 192 yen by the break, while Kawasaki Heavy Industries was up 1.80 per cent at 339 yen following a report in the leading Nikkei business daily that the pair are set to launch merger negotiations.